GMX
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Correct. For years I (like many others) thought the same until I started researching how they assign locality, create new areas, and add other areas into existing ones.But locality has nothing to do with the cost of living. There’s a huge difference in the two.
From a recent OPM document for current locality changes:
Many commenters expressed the belief that various indicators of living costs are or should be considered in defining locality pay areas or in setting locality pay rates. Under 5 U.S.C. 5304, locality pay rates are based on comparisons of GS pay and non-Federal pay at the same work levels in a locality pay area rather than on any consideration of local living costs. Relative living costs may indirectly affect non-Federal pay levels, but living costs are just one of many factors that affect the supply of and demand for labor, and therefore labor costs, in a locality pay area. A comparison of living costs between geographic areas is not permitted under the locality pay law, but even if it were, it would not be a reliable indicator of local labor costs.