Salaries within two distinct geographic regions often vary substantially. Employers within a market economy must compete for talent and labor in the same manner in which they compete for customers. Employers must therefore entice perspective candidates with a compelling value proposition relative to peers. This proposition often includes aspects such vacation, retirement plans, and special rights and privileges. A major component of the ability of a company to attract and retain talented candidates is salary. Two economic forces heavily influence pay differences within respective regions of the country. One of which is cost of living within the particular area. Cost of living in particular has many variables that comprise it (Dohrn, 1996). Aspects such as living expenses, taxes, inflation, and transportation are all components within the cost of living calculation. A higher cost of living often demands a salary premium when compares to other, less expensive areas. The second economic influence that determines salary is available labor supply. Often the sheer rareness of a skill often causes employers to bid for the individual's services. Much like supply and demand in an economic context, a shortage of labor often corresponds with an increase in price. These two influences have a strong impact on wages and the subsequent compensation an employee receives. This document with discuss the varying salaries of a...
The discrepancy is large with a Treasury Analyst in New York commanding a salary of $150,000 as compared to $60,000 in Florida.
When looking salaries, one must first be cognizant of the cost of living within a particular area. Generally speaking cost of living varies dramatically by state. For example, New York and California have historically been the most expensive states to live in. Meanwhile areas such as South Dakota and Texas have been cheaper. The economic e influence of cost is a strong driver of salaries within a region. Employers must attract candidates with a salary that compensates for the higher cost of living associated with the region. Otherwise, candidates would not accept an offer due primarily to the fact that they would not be able to affordable live in the area. The cost of living is often derived from structural aspects embedded within the state, or region (Finley, 1973). Aspects such as taxation, infrastructure, and political affinity can have a large impact on the cost of living. Taxation is a very large proponent of the cost of living. The federal government taxes wages and in some instances states tax income as well. This state tax in conjunction with sales taxes on consumption can be particularly burdensome for candidates. New York for instance, has fairly high tax rates in relation to Florida.…
