Doesn't that boil down to "it's the way it is because it's the way it is"? Seems a bit... circular.
The question is why a Kenyan in Kenya is worth less than an American in Mountain View for the same work if it is not dependent on their location? What's happening to all of that excess value that's not being returned to them?
If all of Google's employees in Kenya emigrated to the US, what would happen? What happens when global mobility is not exploited in returning fair compensation to workers?
Not circular at all. Cost of living varies per location based on a wide variety of factors. Where's the circle?
A Kenyan in Mountain View would be paid the same as an American in Mountain View, much like an American in Kenya is paid the same as a Kenyan in Kenya. Similarly, an American in Mountain View makes more than American in Alabama. If they didn't, then the market isn't pricing in cost of living which would be a complete failure of market dynamics. People demand a certain wage because of the price of food, housing, etc, and that cost of living is so universal for a geography that all prospective employees will need the same minimums which drives the price of labor. When you don't have the same basic needs across a population, then those who are willing to work for less will get the position at a lower pay.
If all of Kenyan Google employees emigrated to the US, I'd expect their pay to go up.
Your notion of exploitation strikes me as unaware of world wide standards, and is actively counter-productive. If I'm in Indonesia I can find great fried chicken for $1-3 in a 'luxury' mall. I cannot do that in SF. If American companies pay locals abroad 10x the average pay, you end up causing bubbles that drive up the prices for everyone because some people are now able to move markets. This is why housing is so expensive in SF - there's enough wealth that the market can just keep upping its price and the demand will bear it.
The entire idea of 'fair' compensation is relative and not universal. The world itself isn't uniform, there is no single currency (which is a good thing), and projecting a uniformity on it suggests a dominant mindset. Who get to set the 'fair' prices? If Huawei pays their employees in China half or less of Google employees in Mountain View, does that mean Huawei should also pay the same Chinese wages to those they employ in Mountain View? Is that 'fair'?
That's just describing the current practice of market pricing, not explaining why Mountain View comp is higher than Alabama or elsewhere (ie- why comp is not actually a function of COL + base pay).
Given two people performing the same work that Google derives the same value from, if that value is not dependent on either person's location, then how does Google justify the differential in pay?
Unless they're just pre-assigning a universal value of worth to geographic areas, then what's the logic for their compensation at all? If they reduced overall salaries or moved locations, wouldn't it counter the very situation you described - a la expensive chicken? Wouldn't it be more efficient move to Alabama where not only their expenses would be lower, but their employees'? Why not split Google into entities across the nation to balance comp and uplift more areas?
If your logic were true, it wouldn't make any sense to hire people who lived in "expensive" areas. Because we know that's not what they're doing, it could be interpreted that Google is still taking advantage of largely manufactured inequality, even domestically.
Google does work through Alphabet-adjacent sub-corps that are only legally 'not-Google' that do work exclusively for Google. Several exist in my area, and they pay no more competitively than any other company for the same roles. Talking with their engineers, they're largely just happy that their H1B was approved and that they're not working for Amazon.
>that Google derives the same value from, if that value is not dependent on either person's location, then how does Google justify the differential in pay?
Because the pay is independent from the value the person is generating. It is just the amount someone is willing to accept to take the job. The amount Google pays is based off what other employers are able to offer people living in the area. They gather market data of offers made by the other employers and themselves and then choose a range that they are willing to pay hoping that paying an upper percentile will attract top talent.
>Why not only higher from LCOL areas
The two main factors are that Google wants to hire top talent and they want to have people come in to their offices which may recide in a HCOL area. For why not to split up the offices I imagine there are due to some underlying network effects with having coworkers be at the same location and partner companies being a short ways away.
The question is why a Kenyan in Kenya is worth less than an American in Mountain View for the same work if it is not dependent on their location? What's happening to all of that excess value that's not being returned to them?
If all of Google's employees in Kenya emigrated to the US, what would happen? What happens when global mobility is not exploited in returning fair compensation to workers?