> I don't think you should pay some one more because they want to live somewhere expensive

I don't think that's the problem. The problem is, if you have someone you want in your team, and if that someone is living in SF for example, then you can't offer him the same kind of salary otherwise he will never accept.

I don't think I was very clear because this example is backwards. Maybe I should say we don't pay people less because they live in a flyover state. Engineers in sf do produce value that justifies a high salary. In many cases engineers outside sf can produce as much value.

So you don't have offices in SF then?

We do.