Your mental model is all wrong. There's no moral calculus being used to determine how much you earn. If you want to think like that, then you'd have a hard time justifying differences in pay for different lines of work, especially since they don't correlate with how much or how hard you work. You don't make more than the guy laying tile because you work harder than him. It's because there's a lot more people who can do what he does than what you do.

Labor is a market. It's supply and demand. All of that stuff you're talking about--the cost of eating out vs. cooking, rent in Silicon Valley vs. Wisconsin--doesn't need to be calculated. The market price for labor in a city is how much you need to offer to get enough qualified people to work for you in that city. People’s preferences, for eating out, for living here or there, are factored in to how much they’re willing to work for.