I was about to write a long economic essay on why this can&#x27;t always work out, but I think the main thing here is that he is talking about a distributed team. in which case, (I presume that) the location has very little advantage unlike a company that is let&#x27;s say based in Sillycon Valley with sales efforts there as well elsewhere in the States, or development work that relies heavily on collaboration (as opposed to top down direction).<p>In which case, realistically Ann should get paid the same amount as Sofia. No problem hiring all Sofias if Ann&#x27;s situation in Sillycon Valley does not confer any benefit to the company at all.