It also has a relatively high minimum wage (compared to the US) and high employment tax and lots of pro-employee regulations. Hiring people is very expensive for employers here, even if _average_ salaries are low.

The cost of living is not just related to salary but also energy being 3x more expensive than usual, house prices, food prices going up 30%, Brexit, etc.

Either that or due to political restrictions preventing more housing being built, land is overvalued.

Any increase in wages is taken by landlords who increase the rent. The competition for a house isn't the next door house, it's not living in the city at all.