Cost of Labor

More competition for talent drives cost of labor. It's not about deserving it's simply a market rate.

250k at fbook....Are you complaining that you get paid too much? I’ll gladly help you out with some of your extra money

Ill try to answer the cost of labor part of the question (it's pretty obvious why cost of living doesnt have much influence on wages in high paying professions) You are right- engineers in the US are not magically gifted. The (significant) gap in wages is due to their far more developed tech eco system in the bay area (VC funding, experienced entrepreneurs, etc), very lucrative local market (you can be worth billions without ever targeting anyone outside the US) and the relative scarcity of talent. Combine that with the fact that most companies operate far less effectively across geographies and timezones and it makes perfect sense why companies insist to hire most of their talent in the tech hubs. (E.g. if Zuckerberg was trying to build FB in spain, its very likely that it would have failed). These properties push wages up, which attracts top talent from all over the world, which attracts the best entrepreneurs, which attracts VC money and that all keep increasing the gaps between wages in the bay area and internationally. This doesnt mean you dont have very strong talent elsewhere, just that other locations dont come close in terms of talent concentration across all tech roles. This may gradually change when remote work becomes more efficient and common and as companies are forced out due to the high wages they cant compete with (most successful and sustainable tech companies dont have margins like fb and cant really justify the high wages, they are forced to hire elsewhere). China, btw, is a good example for how having a huge local market enabled them to build their own local eco-system which over time may end up paying very very well.