It's not that simple. If you pay more than the next factory over for the same work, you become uncompetitive with that factory, and you start losing contracts. If that becomes bad enough, that will drive you under. This is why minimum wages are important - to make it so your neighbor also has to pay the better rate as well. This breaks down somewhat when your factory is competing with another factory in another country, unless your factory is much more efficient.

Short of world government with universally strong rule of law, there's not an easy solution that I can see.