Are you suggest that elite talent wants lower salaries in the Midwest or Florida as long as they can get a one time relocation payout?
Google might save support staff salaries, but I don't think they'll save engineer salaries with your plan, they might even have to boost them.
My comment is that in less desirable locations people need to be paid more to be there if they don't have to be. The cost of living is not really relevant.
If you live in a high cost of living area, but are okay living with roommates you can save a ton of money. More than enough to make up the difference compared to living in a low cost of living area.
You also get better quality of life and a lot more opportunities - meeting people for work/friends/dating. It's also better to have a high salary in order to more easily keep a high salary.
I think you also learn more faster from increased exposure to talented people. I grew up in Buffalo which is a nice and very cheap place, but there was nobody to learn from.
Maybe it will be different in my thirties and forties but right now I want to either live in a (cool) city to work on exiting projects or be travelling. It may sound pretentious to some, but it's what I want.
I would imagine quite a few people feel similarly. In that way a campus in New York City makes sense I believe.
In particular, if one anticipates returning to a pricey location later in life (e.g. needing to take care of elderly relatives there), one has to save for retirement at a higher level than if one can stay in the cheaper place forever.
Cost of living comparisons used to justify salary reductions rarely account for such scenarios.
With that said, the numbers can still work out to make it a good financial deal, it's just less automatically true.
But it's not for lots of people who can afford positive savings in both locations, unless the absolute pay difference is less than the absolute difference in CoL at the level they would maintain in each place; even people who would prefer the lifestyle and environment of a cheaper (often rural) place often spend most of their working life in an area with a more robust economy and higher pay and CoL to increase savings, and then retire to the cheaper place. (A lot of the net domestic migration out from CA is, I suspect, that, as people executing that strategy reach retirement.) And that's not to say anything of how that utilities balance for people who actually prefer the lifestyle and environment of the more expensive location.
I can actually afford a house. My dog has a yard to play in. I haven't been mugged since I left! No one uses my doorstep as a bathroom. My neighbors actually come say hi to me and are invested in forming relationships knowing I won't just up in move in the next year due to housing costs. We have decent enough restaurants, bars, bowling alleys, pool halls, movie theater, mall, etc, and if I really want to, I am within driving distance of the city (edit: for a day trip, no way in hell would it work for me as a commute). Yet, I haven't been back since I left.
I think it's more nuanced than your comment indicates. You might be surprised how many people might take up an offer from Google to move to the boonies (I'm at least one).
A train which sometimes get you there in 45 minutes, sometimes in 60 minutes, sometimes gets cancelled because of (Amtrak signal problems | disabled Amtrak equipment in the Hudson tunnel | overhead wire damage | $ PROBLEM_OF_THE_DAY).
He says while crammed in to an NJTransit train.
Not to be a ass, but where? And please don't just point out a home with no pictures you just found on Zillow, but a place where you've actually been to which has decent property taxes, decent schools, and is safe? And actually a 45 minute commute, not 45 minutes if you ignore the 20+ minutes it takes to drive your car from home to a train station and pay $50+/month to park for a reserved spot.
I ask this because I used to live in a NYC area highrise and always used to think over the about the seemingly fantastic deals in the suburbs. Then I started looking and realized real-estate websites and Google Maps commuting are a far cry from reality.
Here's a great example. 36 Ball Ter, Maplewood. $550K, ~2200 sqft, interior looks newly renovated, looks really nice in pictures. $15.5K(!!) in taxes. With 20% down you're still looking at $3.5K/Month(includes property taxes) on a 30 year mortgage.
If you look at the price history on Zillow or Trulia, it looks like it was flipped (I think that's when the interior renovation was done) late 2017/early 2018, and the price went up to $750k and has plummeted since then. So the property tax assessment is probably on the pre-renovated value, not the renovated value. So whomever purchases this house can expect a fat tax increase when the town reassess the value.
Also, look at the prices between the East and West side of Maplewood. The East side is fairly close to areas that lots of people would prefer not to live in due to safety concerns.
Again, I'm not trying to be an ass or attack you. I'm just trying to present some real numbers so people have a realistic view when they think the greater NYC area is a place you can escape to when you want access to NYC with a medium CoL. NYC is a very high CoL area and moving to the suburbs can hurt (e.g. terrible commute) in unexpected ways, and you still have a high CoL compared to the majority of country.
3.5k a month is affordable to people who make 130k+ a year, which is less than a new grad makes at Google, where this is absolutely cheaper than anything within a comparable commute to google offices in the bay area at all, or around Seattle in school districts of similar quality.
New York Metro is in no way cheap, and I was never trying to make that argument, just that it can be substantially cheaper than the existing major tech hubs.