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Labor costs are a function of cost of living.
by teaspoon 16y ago
Labor costs are a function of cost of living.
- eru 16y agoAre they? Any data to back up your claim? (As an equally plausible hypothesis I'd guess that outside of extreme regions like Antarctica, higher wages are a prime reason for real estate values, and thus contribute to higher costs of living.)
- btilly 16y agoChicken meet egg. Egg meet chicken. Labor costs and the cost of living both affect the other. Arguing which came first is pointless since neither exists in a vacuum.
- eru 16y agoI don't know. The primary cause of high wages seems to be high productivity.
- btilly 16y agoNot so! During the current recession wages have gone down while productivity has gone up. Furthermore even people in marginal jobs will make more if they live in a high cost area. For instance a gardener can charge more per hour in Los Angeles than in Ohio, even though the productivity of the two are identical. Wages are fundamentally set by supply and demand. Productivity affects demand, and hence affects wages. But a high cost of living changes the supply curve, and also affects wages.
- eru 16y agoI do not disagree completely. > For instance a gardener can charge more per hour in Los Angeles than in Ohio, even though the productivity of the two are identical. Yes, that's because gardening isn't traded.
- deleted 16y ago[deleted]