In theory, the increase in wages would just push up prices until costs there were the same as here. In reality the economy of each of those economies would tank before those prices got high enough to cover the increase in wages. People don't like high inflation like that though, it ruins their savings and people who have been paying into pensions for 50 years suddenly find out those pensions are worthless and have to rely on the sate for a living.
So the only safe way to bring one economy up to the same level of another would mean having a steady increase over a long period of time (assuming decades)?
In order for the market to be effective, there really always needs to be a constant supply of labour from further down the value chain. This is where the EU has been reasonably good for us as there's been a supply of cheap labour from countries that are reasonably similar in culture and language (within certain bounds) to fill those roles. I think it would have been significantly more difficult to fill those roles from other continents as easily.
So basically for the market to remain profitable and in a state of growth it has to be a worthwhile investment for a company? Essentially no one is going to build an apartment block if they stand to make hardly anything out of it themselves. Being able to cut costs by hiring cheap labour from the continent, makes the project more profitable and so in turn a bigger attraction for further future investment in the same area by that company and others?
