...... what? This is an example that capitalism does work. If someone wants to live in Random City A then Facebook will still have to compete with the local wages there to get people to work for them. The labor market is supply and demand driven. And of course Facebook decides the wages of their employees, how else would it work? The employment agreement is two sided, if people don't like the offer they can go work somewhere else.

Massive caveat: Facebook is an absolutely garbage company and the world would be better off if they didn't exist. But paying less based on location is reasonable.