There is also the labor wage rate compared to cost of living.  A worker in a high cost of living area requires a higher base salary then one in a low cost of living area.  A $20,000/yr salary in some 3rd world country is a "Middle Class" wage.  $20,000/year won't hack it in the US.

This process drives down wage rates in the high cost of living countries, reducing surplus funds for non-necessary purchases, and reducing the purchase of the ball bearings.  Eventually there's the situation where no one can move because we're all standing on each other's hands.