The relationship isn't direct, but it ends up roughly working out this way, because whenever a company has a choice between two or more candidate employees, the

The relationship isn't direct, but it ends up roughly working out this way, because whenever a company has a choice between two or more candidate employees, they bid the salary down to the point where one of them walks away. The point at which walking away happens is going to be related somehow to the cost of living in that location. There are a lot of idealizations in that explanation, as I said it roughly works out this way.