I think the guy you're responding to was referring to overall productive lives, not job productivity.
First of all, jobs in the city are going to require working 10-12 hours per day rather than the normal 8.
Second of all, they require a commute even if you live in the city. In my city, if you live 3 miles from work the bus ride will be 30 minutes on average. And that's the ride itself. The time it takes you to
(i) Ride the elevator down the main floor of your apartment
(ii) Walk to the bus stop
(iii) Wait for the bus (which almost never comes on time)
(iv) Board the crowded bus
(v) Ride the bus to the bus stop closest to work
(vi) Unboard the bus
(vii) Walk from the bus stop to your work's building
(viii) Walk from the entrance of your work's building to your office
will be more like 60 minutes. One way. So that's 2 hours of commuting every day.
Already, that's 12-14 hours per day centered around work. You're either going to have to sacrifice on sleep or sacrifice on doing things outside of work.
Are salaries higher on average? Not necessarily. In my parents' blue collar town, the median household income is $77k while in my city the median household income is $70k. The respective median home prices are $200k versus $700k. The median home in my city is a shanty. Think about that.