I always found the obsession with location-determined compensation weird. Experienced workers know exactly what their skills are worth regardless of the local labor market, so why even try surpressing their wages?

Besides when you're an aerospace company producing rockets for NASA you are not building a product that the local market pays for, so why should your workers be affected by what the local market is willing to pay for their skills? How can the local labor market accurately value their skills if the product of their labor isn't sold in the same market?

Because with non-remote work like welders you're competing with the local market for welders. Of course if they're paying 30% below market that means they're not properly doing location-based compensation.

It's also a plain idiotic move because you'll end up with workers who cost 70% as much and are half as productive, at best, or at worst workers who cost 10,000% more because they screw up a critical component and cause massive delays.