by Jim Brennan - www.erieri.com
If your salary differs based on where you live, it usually means you work in the same place you live. Salaries tend to be based on where you work more than where you live. If you live in East St. Louis IL and work in St. Louis MO, you will be paid according to the local Missouri rates. In that case example, both your gross (total before deductions) and net (after deductions) also differ more; because the City of St. Louis has an earnings tax.
Different locations feature different salaries for otherwise similar jobs because each area has a unique competitive market for labor, based on the practices of employers in that area. Generally speaking, people are willing to work for different amounts in different locations. Manhattan workers demand different salaries than those in Queens, for example. Los Angeles has different salaries than Detroit. Miami pays differently than Atlanta. Salaries vary by the practices of the employers in the area.
Every organization has its own way of paying people. Each decides which labor market will apply (and for what jobs) as their basis for competitive comparisons. For jobs where good candidates can easily be found within the nearby commuting area, most employers pay local competitive rates. When the company has to search an entire region of states to find the right worker, they will be forced by competitive necessity to pay a regional or even national salary. Executive jobs tend to be paid on national or international scales where the pay practices nearest the work location are less vital than the pay practices within the reach of the candidate. Hourly workers usually can’t justify moving to another state for a higher wage and thus tend to be limited to a relatively narrow range of local pay; but executives move (usually with their relocation expenses paid by the employer) routinely and know that they operate in a wider competitive market for pay.
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