I think the key difference (having done both) is that when you are consulting, a company is paying you (usually out of a pretty large budget) for a business out

I think the key difference (having done both) is that when you are consulting, a company is paying you (usually out of a pretty large budget) for a business outcome that they really, really want. When you are selling something that somebody with a lot of money really, really wants, you have a much easier time convincing them to pay you a lot of money. So your rate is really a function of those two things- perceived value of what you are delivering and how much they have to spend. It has nothing to do with what they pay other people who work there, etc. When you apply to a job, they see you as a permanent cost center and not as an immediate way to grow their bottom line. In this case the negotiation changes to a large degree. I suppose it's possible to transfer the conversation during a salary negotiation so that you are selling based on the points above, but I think that's much easier said than done. I think this constantly recurring point about raising rates is based on people who sell consulting services having a larger-than-necessary gap between what a company would pay for the outcome and what they are charging.