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This is to prevent "Speculators" from secretly buying up your underpriced goods from your market during events which increase the prices of those products on the caravan. (Yes this is an actual game mechanic...)
I pay 50 gold to peasants and a bit more for warriors. Unemployed get 42 gold.
I charge 30 for meat, 20 for rutabaga and 20 for beer and 12 for moonshine.
I also have a very small amount of flavorful Ale (10) priced at 100 gold which I use as a special money sink in case some of them have too much money saved up from occasionally starving. Sometimes I also price meat at 100 gold to drain some surplus if anyone has too much saved up (occasionally my city starves :P).
Just because your city starved for 2 days (crop diseases etc) doesn't mean that your people will eat 3x the next day... no they still eat 1x. So the boosted prices are to fix the economy.
And in the case of warriors they get paid a salary when they are spending days out of the city even though they can't spend any of it until they return so they sometimes end up with 300-500 surplus gold in their inventory, this is how I get my gold back. :P
Mechanically, you should always aim for zero-sum balance...
ie. 100% of what you pay them.. is 100% returned to you every day.
The reality is that this is not possible, because of fluctuations in pricing, production, supply, demand (Lords/Warriors obviously can't eat when they are not in the city).
So for example 4$ flour, 7$ wage and 9$ moonshine would mean they drink once every 3 days if they do not win or lose money gambling.
Innkeepers, merchants and servants seem to be buggy and hoard money without drinking so you might want to put some overpriced meat every now and then if you do not rotate them from jobs.
Likewise immigrants some with 12-18ish gold so you might want to put some beer that costs even more than moonshine assuming you are not giving it to everyone already just like flour.