Exactly. If you'll excuse me highlighting the obvious, the floor-mopper in Puerto Rico is having to work just as hard as in some other place where the economy is better, so there is a transfer of wealth from that person that's generally not accounted for.

That assumes that the person's work has an inherent value, and further that this inherent value is equal to the highest amount it can be paid in any market. That hardly seems reasonable.

Consider two countries, A and B. A has limited economic development, low technology, poor infrastructure, low education. B is far more advanced. A and B lie on opposite sides of the globe and have essentially never had trade or direct contact. (This is an accurate scenario before the Age of Exploration, where travel was far more limited than now, and there were already large differences in the relative level of development of various lands.)

Person Pa mops the floors in country A and gets paid $0.25/hr. Person Pb mops the floors in country B and gets paid $5.00/hr. (You may wonder how we can define both of their incomes in dollars if the two countries have no contact; you can define a virtual exchange rate based on respective purchasing power, for instance).

Your interpretation states that there is a transfer of wealth from person Pa to... person Pb? Everyone in country B? Everyone in country A? It's not clear, but any of those conclusions seems unreasonable. There is no causal connection between country A and country B, so there can be no wealth transfer between them. And how can the existence of country B, at the unknown and unreachable recesses of the earth, cause a wealth transfer within country A?

The more reasonable interpretation is the opposite: it is person Pb who is receiving a transfer of extra wealth. From whom? From the past and present inhabitants of country B, who have created the wealth, technology, infrastructure and knowledge that allows Pb to receive more for the same amount of work. This interpretation, unlike yours, is backed by clear causal connections.

I do agree, however, that people often fail to account for this transfer of wealth.

I'm looking at it from a different perspective: to stick with your terminology, Pa and Pb must both expend the same time and effort to mop the floor, so their costs (in terms of physical energy expenditure) are identical.

You are correct about the greater transfer of wealth going to Pb, in that if Pb visits country A, s/he will have vastly greater purchasing power and thus economic opportunity (is s/he wants to settle down there) than the reverse situation of Pa going to country B.

Consider the possibility, in these days of globalization and corporate reach, that both are employed by the same firm, such as Walmart of 7-11 (let's forget about franchising and other specific details and consider only the obvious labor cost variations).

So now we have two employees, working for the same entity in different contexts, doing the same amount of work, and enjoying the same amount of purchasing power in their local economies - but very different levels of purchasing power if they wish to visit each other, which asymmetry will inevitably be compounded over time.

My basic point is that it's a matter of luck whether you are born in country A or B, but ceteris paribus there will be a significant and increasing opportunity gap through no fault or merit of the individuals involved. This is in my view a Bad Thing.

I am sorry for not laying this out more clearly, and by using the phrase 'transfer of wealth' I may have obscured my point. I agree that Pb primarily benefits from the whole economy of country B, but invite you to consider the low and inevitably worsening bargaining position of Pa (and by extension, the whole of A) in any kind of international transaction.

Is A a worse country because of some moral deficiency? Absent a specific and obvious cause, that conclusion might be the result of a 'just world fallacy.' Regardless, this is of little comfort to Pa, who can hardly be held morally responsible for the past failings of the society in which s/he originates.

You are assuming that everyone is entitled to an equal share of the wealth of the world, irrespective of who produced it, and why.

First, this is at least as strong an assumption as the just world hypothesis, and at least as poorly supported. As it happens, invoking the "just world fallacy" is usually a sign that one is about to commit a fallacy that is just as bad. In fact, I would say it is worse, from a series of theoretical and practical considerations.

In my previous comment I have already shown an example of how your hypothesis (I am going to be charitable and not refer to it as a fallacy) leads you to a paradox. But there are many more.

Consider people born at different times of history. Do people who were born in the past suffer an injustice from the people who live in the present? "Well, but I can't do anything about it." Not for the ones who were born two hundred years ago, but what about fifty? You are clearly a young guy. Maybe even more of your income should be taxed and given to the baby boomers, to compensate them for the injustice of having been born in an age without the internet. (This is starting to look like a just world hypothesis applied to the system of defined benefit pensions...)

It gets worse. Demographically, socialism is the ideology of bourgeoise youths who hate their parents. Psychologically, its root is the rejection of one's parents, and of the advantages received from them. Therefore, guilt for "unearned privilege". But while it is true that the child did not earn the privilege, it is not true that it was not earned. It was not earned by the child, but it was earned for him, by his parents. (It is not a coincidence that adults, and especially married people, are more likely to be conservative.)

So try putting yourself in the shoes of the people whose work produced that wealth, which their children now inherit. Do they not get a say in who gets it? (Remember that they are already suffering from the injustice of being born in the past, so by denying them a say we are adding injustice to injustice.)

And of course, it does not stop at material wealth. There are all sorts of advantages (or disadvantages) one inherits from one's parents, in terms of education, social network, genetics, and so on. The family is the fundamental unit for the generation and transmission of inequality. Which is why the early socialists, who were intellectually honest, made it their explicit program to abolish the family.

Of course, there are many social problems with destroying the family. But there are also economic problems! Being able to transmit wealth to one's progeny is an extremely strong incentive for economic activity and growth beyond pure self-sustenance. In fact, property and inheritance are universal to all developed human civilizations: all of those proto-communist tribes anthropologists found never got much further than the stone age. The most likely conclusion is that they cannot: property and inheritance (in other words, inequality) appear to be an essential social technology that is required for development. The best a communist can hope for is that they may become unnecessary at some later stage of technological super-abundance, when we can all go off and play cowboys in space.

But we ended up focusing on economic factors again. Your idea of equality has much broader implications, though. If you say that the luck of one's birth is injustice, you cannot limit that to wealth. Differences in intelligence are unjust. Differences in attractiveness are unjust. We could go on and develop all the implications, but I'm going to stop here.

It sounds real nice which is why this idea is so pervasive but it just doesn't hold up to reality.

The employment effect of the minimum wage is one of the most studied topics in all of economics. This report examines the most recent wave of this research – roughly since 2000 – to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage.

http://cepr.net/documents/publications/min-wage-2013-02.pdf

> to modest increases in the minimum wage

"Modest" here seems like an unproven assumption. The gap between the Puerto Rican economy and US state economies is much larger than the gap between, say, Pennsylvania and New Jersey.

As far as I know there's no real disagreement on the direction of the labor demand curve. If you put the minimum wage at $40/hour (or $10/hour in China) it would have massive consequences.

So even granting the 'little or no' result, we haven't proved the "modest increase" charge for Puerto Rico.