[whiskyant]

To answer your question, yes, pay in SF/CA/USA definitely outweighs the increased cost of living. Software engineers here are paid more than anywhere else in the world.

It makes sense though since the wealthiest tech companies in the world are here, the most talented engineers gather here for that reason, and companies can afford to pay high compensation packages in order to get the best talent.

I don't expect other parts of the world to increase software engineer comp until they start producing much more billion dollar tech companies.

[slivym]

The reason it doesn't make sense to me is that there are clearly engineers in the UK who are as talented as the average engineer in silicon valley and are unwilling to move to the other side of the world. There are also many many many companies in the US that have offices in the UK. Given that UK engineers appear to earn no where near their US equivalent I would have thought there would be a strong incentive to hire more in the UK and therefore drive up wages rather than continually pump money back in silicon valley.

[illumin8]

Clearly, a talented engineer in the UK might be just as smart and experienced as a principal engineer at a big tech company in the US.

But, this doesn't have to make sense for it to be true. It's simple supply and demand economics. There is a greater demand for top-tier talent in the SF Bay Area because most of the technical leadership is there and they want their best engineers working closely with them. It's not hard to understand.

I read once that the single most significant indicator of where a large company will locate its headquarters is the CEO's home address. It doesn't take a rocket scientist to know that if the CEO lives in the bay area, so will his top leadership, and so will their top employees.