COLA Impact on Salary Levels
Do higher cost-of-living regions command proportionally higher pay?
This slide tests one half of the claim directly. If salary differences are mainly driven by COLA and density, then this chart should show that COLA alone explains a meaningful share of the geographic salary pattern.
Interpretation
X-axis (COLA Index): U.S. average = 100. Higher values mean higher cost of living.
Y-axis (Average Salary): Nominal annual compensation.
Bubble size: Represents sample size (larger = more workers).
Bubbles near the line: When a region sits close to the trend line, its salary is close to what COLA alone would predict. That means COLA is a strong and fairly consistent explanation for salary differences on this slide.
Key Finding
Salaries do increase with COLA, but not proportionally. A 15-point COLA increase (92→107, Midwest to Northeast) corresponds to roughly a +$22,500salary increase. This is significant but incomplete—real purchasing power remains compressed in high-COLA regions due to housing and living cost premiums. In the story focus, this slide shows that COLA explains an important share of salary differences, but not the whole pattern by itself.
Remote workers are excluded from this analysis since they lack geographic COLA anchoring. See the next slide for population density effects.