I would say it's both. A high market rate for labor pushes CoL up (because people have lots of money to spend), but a high CoL also pushes the market rate for labor up (because you can't get anyone to work for you if you don't pay them enough to make ends meet). Trying to decide which one is the root cause is a classic chicken-and-egg problem.
I would say it's both. A high market rate for labor pushes CoL up (because people have lots of money to spend), but a high CoL also pushes the market rate for labor up (because you can't get anyone to work for you if you don't pay them enough to make ends meet). Trying to decide which one is the root cause is a classic chicken-and-egg problem.