[imsofuture]

Remote employees' market is the entire world though, that's the part you're not taking into account. Your competition is the other NYC or Boston or SFO or wherever companies that are willing to hire me and pay me a generally competitive rate (very roughly 80-100% of SF pay, in my experience). Sure, you don't have to compete with a GoogFaceAzon offer, but you do have to compete with the companies similar to yours that do pay a more globally competitive rate.

There's a very important difference between: "SFO is very expensive so we have to pay people who live there more" and "we can pay people who don't live in SFO less"