I think its perfectly reasonable to do this. As someone who would love to be a remote worker as long as my total comp package is acceptable to me, I don't really give a crap if they are paying someone in SF 25% more.

I would more look at compared to local jobs in my area.

For example, my job, my years of experience, in my area (Midwest USA) is roughly $175K on a W2 salary. If that same position is 275k in NYC, but I'm offered it at $175k, sign me up!

I'm sure they would pay me the $275k if I moved to New York...but not living in New York is worth $100k a year to me.

While true, you're going to miss out on some percentage of applicants that are willing to interview a bit more to get a non-adjusted rate. This might be fine if you have a good hiring funnel, but if you're a scrappy startup, this could be challenging.

Also, you will likely end up with a slightly higher churn rate (since smart employees will continue interviewing to see if they can get a higher salary from a place that doesn't adjust based on cost of living).

It's a perfectly reasonable approach to take as an employer, and if you can make it work, all the more power to you.

Totally reasonable to do it just not someone dictating salary

In your case you don’t want to move out, in my case when I move back I’d like to receive the same pay since I’ll be doing the same work

It does have an oddly... socialist flavor for the context ("To each, subject to their needs...").

Salaries being literally dictated by geographical market rates is the opposite of socialism.

You missed both the joke and the point. But that's OK, so did everyone else.

whoosh :-)