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This is all a distinction without a difference. Salaries follow the labor market, which follows the cost of living. The cost of living is different in different
by zarzavat 4y ago
This is all a distinction without a difference. Salaries follow the labor market, which follows the cost of living. The cost of living is different in different places, because of differences in the labor market (demand side) or because of geographical reasons (supply side).
- mjburgess 4y agoIt's not, because "location-based" pay will change if the market price of labour at that location changes. Location is a proxy variable; a distinction which makes all the difference, see for example, Detroit
- spoiler 4y agoRight, okay. That makes more sense now. Thanks!
- robertlagrant 4y agoSalaries don't just (or even) follow the labour market or the cost of living. They are upper bounded by the value an employer assigns a role, and lower bounded by the price an employee is willing to accept to do a role. Within those two bounds, labour markets can play, but the cost of living going up doesn't automatically make more salary money available.