Anecdotaly, I recently moved home to San Francisco from Charlotte, NC. The dominant employers in Charlotte are the big banks, and there aren't a lot of major tech companies there. I was surprised to find that the pay scale -- contract or salaried -- is about the same or less in SF for a senior web developer, despite the great difference in the cost of living in those cities. Maybe this explains it.
My unproved explanation is about age, young people tend to not want to work for banks (citation needed).
Young people can afford less salary but prefer equity, fun culture, amenities and perks (citation needed 2).
A Sr. Java Developer living in Charlotte, Atlanta or Texas needs to make a 6 figure salary to stay in a middle class level quality of living (2 kids, single family home, 2 cars, hole foods market)
A Single Developer in SF needs the same amount of money to live well in the city with roommates.
a NC bank wanting a good web developer can either pay a young SF developer the same money she is making there to compensate for the loss of "living in SF is more fun for young adults than in Charlotte" + "it's a bank, we don't have a ping pong table or beer in the fridge" effect.
Or pay a salary that is going to be enough for a bit older developer who has a family, to live comfortably.
If you consider that there is a cost to moving to Charlotte that is more than a monetary cost, that cost needs to be taken into consideration in the compensation.
