You may view your value based on your skills alone, but the employer is likely trying to hire you for the lowest rate possible that will keep you happy and make you likely to stay. The local cost of living does play into that partially because someone in the bay area can find a local job with higher pay while someone in the mid west will find remote work to be the most profitable.

Eventually this market should lead to people moving to lower cost of living areas because they are more likely to be hired for a livable wage there.