You shouldn't adjust for cost of living; remember, the causality flows the other way. SV and the coasts have a higher cost of living because they've found a more value-generating use of the labor that allows workers to bid up prices. [1] If the system favors them, that seems like it's working properly.

Caterpillar shouldn't pay hedge fund wages; they should pay high-for-the-area wages to draw Americans out there rather than use up competitive slots reserved for the most economically valued immigrants.

[1] Of course, there are land use restrictions etc.