Following your logic, the value of someone in a high-demand market like SF or NYC will be higher, because it'll be much harder to find someone to do the job for the same low price as someone in a non-HCOL area. I mean those willing to work for the same price as a LCOL engineer in a HCOL area are very scarce, so they WOULD contribute good value on average if only you could hire them. But you probably can not, and I agree with the comment above yours.

Maybe compensation/bonuses/promotions are the proper way to reward those who have proven their added value.