For example, wages have been observed to be higher than average in the North and West, and lower than average in the South. But since workers can freely move from place to place in search of employment, regional wage differences theoretically should not persist. If wages are high in one area, workers will move there, expanding the supply of labor, and driving wages down; similarly if an area's wages are low, workers will leave, diminishing the supply of labor, which then forces wages up.

This article appeared in the July/August 1986 edition of Business Review.

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