Expensive Here, Cheap There

It's really a matter of the chicken or the egg: Workers in cities that provide a service or product that is in high demand need bigger salaries because costs are higher, and costs are higher because salaries are bigger. That's a difficult--if not impossible--cycle to break.

"If wages are higher to adjust to higher costs, then as long as the city/region can still produce a good or service that is in great demand elsewhere (e.g. finance in New York or software in Silicon Valley), then differences can certainly persist," says Dr. Dean Baker, co-director of the Center for Economic and Policy Research.

And then again, it's all relative. For the 250,000 auto workers in Michigan fearful for their jobs, $40 may be a heck of a lot for a pair jeans. For others, that's chump change.