[EGreg]

Because the rich people drive up the prices in your local markets. I live in NYC, where the price of a shoebox apartment in Manhattan is sky-high (ignoring rent-controlled places). Why? Because tons of rich people keep apartments here. Had I lived in the middle of nowhere, I could have acres upon acres of land, a spacious, decked-out office, and gigabit internet, for much less than a two-bedroom apartment in NYC. Since everyone has to pay rent, this really affects you, but even if you somehow bunked with others, the everyday expenses such as a cup of coffee are more expensive in NYC. In Moscow and other cities it's even worse.

So yes, living among people who make much more than you obviously depresses your standard of living / cost of living.