Having been an employer in several different type businesses and having many friends who are employers, I can assure you that there are more important factors than pay level.
Yes, in large companies it's common to replace employees with seniority with lower salaried younger ones. But that's usually white collar administrative jobs.
Rarely do you see a good skilled electrician, plumber, carpenter, mason, etc.. replaced by an inexperienced one. It's simply too hard to find good skilled employees.
An English speaking citizen is preferred to a non-english speaking illegal alien. But that's usually not the choice. Usually the choice is between someone who knows their job, is willing to work hard, and can be depended upon to show up for work every day verses no employee at all, or one with an attitude, or one that can't be depended upon to show up, or one that doesn't take pride in his work, etc...
When a contractor has deadlines to meet, he can't afford to hire less than the best employees and he is willing to pay what it takes to get them. If they happen to be immigrants, that's just the nature of the labor market.