This is the best explanation I've been able to come up with as well. Other explanations don't seem to explain the massive difference in compensation between the

This is the best explanation I've been able to come up with as well. Other explanations don't seem to explain the massive difference in compensation between the US and e.g. Canada, which has a similar level of development, education, and per-capita wealth. Google[1] doesn't exist at a large enough scale in Canada to shift the market meaningfully. Canadian companies simply aren't profitable enough to even contemplate paying like Google. [1] Using "Google" here as a proxy for companies that pay like Google.