I'm still not sure I'm understanding you. What I'm asking about is the question of compensation conditional on experience and skill being identical. So by defin

I'm still not sure I'm understanding you. What I'm asking about is the question of compensation conditional on experience and skill being identical. So by definition, I'm taking experience/skill differences out of the picture. So we have Alice: backend engineer in London, able to get $120K from UK companies Alicia: backend engineer in NYC, able to get $250K from US companies with identical skill/experience. And we say for the sake of argument that cost of living is identical in London and NYC. Now suppose Alicia's company wants to hire Alice. Certainly, I agree that it makes perfect sense in a free labor market for the US company to try to get Alice for $120K. But the company I work for (a well-known US tech company) makes many claims about how "fair" its compensation program is. So what I'm inviting you to discuss is whether or not that company would have a hard time making an argument that adjusting according to the local labor market is actually "fair". Essentially, Alice is being penalized for happening to be in a locality where her skills are valued less. But that is out of her control. Would it not be "fairer" for a company to adjust compensation as follows: 1. Firstly, according to skill / experience And then, either 2a. That's it, end of story: skill / experience only. or 2b. By local cost of living, within equivalent skill levels.