That's a good point, but I don't believe it scales at the same rate -- meaning I believe the salaries are much higher than the living costs.
Eg average us salary is probably somewhere around 60k. Let's say single bedroom apartment not in SF is maybe like 1.5k/mo, that leaves like 42k left over.
Google salary I would guess is closer to 150k (low end probably); SF single bedroom is probably closer to 4k/mo, that leaves 102k. Big difference, and note the ratio here isn't as important as the absolute value. You live a very different life with 102k than with 42k.
And also note wealth doesn't really increase linearly with how much money you have, it tends to be more than linear, because people with lots of money are more comfortable investing large chunks of it, which further increases their wealth.
Internally most larger tech companies index their salary bands based on the CoL of the employee. The downturn over the last couple years has had many companies move reqs from high CoL areas to low CoL areas to save money.
IME of Big Cos, it is never cost of living that is taken into account, but what "the competition" in the local market are paying, and then some percentile of that.
Who "the competition" are specifically is 99.9% of the time entirely black-box, as is the percentile that the company is targeting. So they claim it is open and transparent ("we benchmark against local employers in tech") but the actual details are hidden - are the other employers they are using FAANG or someone else? Are they targeting 50% or 95%? Etc etc ("oh that is confidential sorry")
This is how you end up with situations like London, which is obscenely expensive cost of living, yet gets lower salaries than SF and Zurich which in my experience are a bit cheaper than London for day to day costs (e.g. transport, food etc).
London is a physically & metaphorically huge cultural World Capital and attracts loads of people from across the world so there is more competition for tech/high-skilled roles because so many people move to London after they graduate, and stay for good. So salaries are lower but everything else is more expensive due to population density and resulting demand. No one wants to live in Zurich so there are less people competing for each job, so salaries need to be higher to attract and retain staff in such a dull and boring place that people naturally and understandably plan to leave after a few years.
Eg average us salary is probably somewhere around 60k. Let's say single bedroom apartment not in SF is maybe like 1.5k/mo, that leaves like 42k left over.
Google salary I would guess is closer to 150k (low end probably); SF single bedroom is probably closer to 4k/mo, that leaves 102k. Big difference, and note the ratio here isn't as important as the absolute value. You live a very different life with 102k than with 42k.
And also note wealth doesn't really increase linearly with how much money you have, it tends to be more than linear, because people with lots of money are more comfortable investing large chunks of it, which further increases their wealth.