When I'm considering where to hire my next team or open my next office (both things which I've actually done, including a European dev office [in Prague]), I assure you that I look at as much of the entire picture as I can. That includes the cost of benefits, cost of taxes, labor policies, education and size of workforce, etc.

The more labor costs an employer in category X, the less the employer has left to offer labor in categories Y and Z.