Consider that when the net pay doubles or almost doubles, the income tax bracket and other related payments may go up considerably, so the labour cost of the employer may easily triple. But even a doubling of the price of food for example may just counter the wage increase especially for the poorer strata of society.
I fully agree though that the wealth discrepancies are a bad thing, I'm just not sure whether they are caused by the free movement of labour alone. You also get free movement of labour within a country and it is perfectly possible for the wealth discrepancy within a nation to be as large as the one between two nations. Within Germany we also have a few wealthy cities and some cities that are close to bankruptcy. With your argument, we should limit the movement of labour between these cities to give the poor ones a chance?
One could even argue that the wealth discrepancy leads to the wage depression as wealthy people get more control over politics and therefore it is a vicious circle. However, we worship the free market with all of its invisible hands and every politician who wants to change it seems to have close to zero chance of getting elected. I still maintain that wealth is relative and every time you "empower" a poor guy to be able to buy a TV, having a TV is now the new standard for poverty. That is something you can only mitigate by doing something against the income and wealth inequality and therefore the difference in political power.
We currently have a competitive system where everyone likes to pretend that we can all be winners if we just want it enough and stick to the rules.![]()
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