In theory I agree. In practice, has anyone seen anyone work farther from work on purpose to pad their pay?
I suspect if commute time was indistinguishable from work time as far as pay goes, employers would still want to encourage employees to live closer to work in various ways.
"In theory I agree. In practice, has anyone seen anyone work farther from work on purpose to pad their pay?"
Look at it in another way -- you're basically penalizing the employees that don't spend time commuting by paying them less money. In practice I've seen this kind of phenomenon with smoking. Many years ago, in the army, the smokers got smoking breaks whereas the non-smokers did not. Soon almost all soldiers were smokers!
I've seen it first hand. At one large financial services company employees who came in early (before 7am) or stayed late (after 9pm) had access to free black cars for commuting.
That had a direct impact on at least one person I know's decision to move further from the office.
although most believe the cost of commuting falls to the employee, in reality, the cost is shared. a long commute means the employee will demand more money, quit sooner, not accept the job in the first place, etc.
The onus is on the employee to optimizing getting to point X by time Y. Whether that means living closer or leaving earlier, they make that call.