They'll pretend to work and you'll pretend to pay them for the value of their work. It worked out handily for the Russians in the old USSR. New York and Washington are more expensive than Pierre, South Dakota. Basing US compensation on Pierre's costs is going to screw your employees, even if Pierre is a State capital. For the record, Pierre is pronounced "pier."
Defense Ministry says had no knowledge of alleged improper defense deals by Gal Hirsch (Haaretz)