> Firms trying to normalize location based pay are trying to short-circuit the law of one price—or at least slow the development of equilibrium by introducing friction
Considering the firms lowering the prices are currently paying far above the median in global wages, they’re doing the exact opposite of short circuiting the “law of one price”.
The whole reason for paying higher than median wage was the friction of being geographically located in high demand areas.
Considering the firms lowering the prices are currently paying far above the median in global wages, they’re doing the exact opposite of short circuiting the “law of one price”.
The whole reason for paying higher than median wage was the friction of being geographically located in high demand areas.