You can just start working anywhere inside the Schengen area without needing any permit or working visa. Its more like the US States rather than different countries.

Not true. Unfortunately.

The Schengen agreements regulate short-term stays only. For long-term stay or work there are specific laws, different for each country.

I wish this were different, but Europe still has a long way to go before it is a single open market.

If you are a Schengen citizen then try it. Just grab your stuff and go to Valencia or Stockholm and stay there for 10 year, no problem. Of course you have to pay tax there, register locally, etc. As EU citizen, you can even vote in local elections, as voter and candidate. But not all EU countries are in Schengen, and not all Schengen countries EU members. In many countries, the people are just too afraid for change. Same as with the Euro. People in countries like Sweden or UK are just too afraid to give up control of their own currency.