Well the simple answer is because they can? And I don't think there is actually anything wrong with that. You can buy a house for cheaper in the rust belt, and probably other things are cheaper too, hence a lower COL location.

Let's say I paid you 100k in the rust belt, and you're happy with that, you might not be happy with that in NYC because of the higher cost of living. The inverse is true too. If you're happy with 100k in NYC, you'll be more happy with it in a lower COL location. Which means I can pay you (and more importantly others) less and they'll still be happy. This changes the supply and demand equation.