[projectramo]

Well, there are a few other things to add:

1. There might be a feedback mechanism between the two since high salaries could lead to high cost of living which in turn means that companies have to offer higher salaries etc.

2. The higher salaries don't explain the entire cost of living story since cost of living has risen faster than salaries.

3. Cost of living -- primarily the cost of housing -- seems to spike after certain events. IPOs, or other large liquidity events.