The question of whether lower pay equality leads to higher economic growth seems to forget that the big creator in economic growth is advancing technology -- more precisely, maturing technologies (plural).
If a more equal distribution of output is sought by means other than high pay -- by over-regulation which makes employers hesitate to hire because they cannot fire or because they will have go on paying after they fire; or by requiring benefit levels that raise labor's price too high -- then that may cause unemployment. But even that is not the same thing as lowering output per worker (sometimes over-regulation generates higher output per worker as a way to avoid hiring). I am thinking mostly of Europe here.
On the other hand, if workers wish a higher price for their labor at the cost of fewer jobs that is not necessarily an irrational choice -- fewer better paying jobs conceivably result in the same overall amount of pay for less work. Thinking of big jumps in the American minimum wage here, too (not that I am saying that even a $500/wk minimum has to cause any job loss -- probably some shifting of demand). In any case this is labor's choice in a democratic society.
Much unemployment in Europe can undoubtedly be blamed on the automatic -- and high -- dole, in combination with over-regulation. All of which, once again, is not the same thing as lower productivity growth which is the only thing that can really devastate a national economy. As long as technology is kept up with, the GDP can always catch up -- come to think: technology can always be caught up too.
It all adds up to: the sky ain't going to fall because of more fair slicing of the economic pie. Didn't that go out with Ricardo or somebody?