No, evidently, you are not understanding what I said. I'm not arguing with you, nor do I want to, but even if he needs to make $1.40 to my $1.00. If our money spends the same and I charge $50 an hour and he charges $50 an hour, I will indeed have more money left over for more things, but we as sign shops are on an even playing field for what we charge. Therefore, if his shop rate reflects the higher cost of living, his should be higher than mine to begin with, as you said yourself..... higher needs deem higher wages, but I don't think he is. I think some time ago, I read his shop rate and it's note $85. an hour.
No matter where I live or how I live....... if it costs me $5,000. a week to keep my doors open, what should my shop rate be ?? Based on your theory, I don't need as much as someone living in one of the ritzy areas you mentioned, if they only need $2,500 a week. Therefore, I can charge less. Well, it doesn't work that way. Your argument is correct in that higher cost of living shoves your rates up, but you must stay within your means to make ends meet. However, I could be working in my garage, no overhead, no payroll not much of anything...... insurance, use my house electric rate for a business and still live in that expensive area and still lowball my competitors. Let's go a step further..... everyone complains about what sneakers cost, dog food, computers and whatnot...... when it was all made here, it was competitive pricing and profit margins. It was almost cutthroat, huh ?? As companies moved to areas like China, Mexico and other places where labor is cheap, but kept their prices just about up where they were, they made better profits. How so, if they are working in areas where the average take home might be $25 a week, no benefits or anything else. How does your theory work for big business ??