Indeed, if 'Z' is not lower than average, then they shouldn't be having so much trouble. And if it is lower, then that is exactly the H1B fraud people are complaining about in this thread - paying below the prevailing wage.
When I do basic salary surveys, companies in Seattle appear to be paying market rate. Early stage, and pre-funded startups typically don't, but most other companies do.
The salaries don't compare to Bay Area salaries (but they are up there), but that is because our housing options are much more affordable.
The feeling I get is: Bay Area engineers don't want to move to Seattle, and Seattle engineers don't want to move to Bay Area, unless the comp is significantly above market.
Is 'Z' a low number compared to the average employee? If that is, maybe that's the problem?