Salaries are not based on the value a company gets, but on supply and demand of workers. If the said developer brings in $200k of value to me, but I can hire th

Salaries are not based on the value a company gets, but on supply and demand of workers. If the said developer brings in $200k of value to me, but I can hire the developer for $100k a year in Dallas, then I am going to hire them in Dallas. The reason I am willing to pay $140k and hire in NY is because the same developer cannot be found in Dallas. So it is possible that the Dallas employee is actually more valuable to the company ($100k profit vs $60k profit), but they still have to pay more just because people are not willing to move to Dallas from NY. Indexing on CoL will help is better distributing wealth across the country - think of the impact of $100k going into Dallas economy vs $140k going into NY economy. So there are some long-term benefits to the economy in general.