[simmons]

I think the relationship of geography to salary is going to be dictated by the biggest factors in all pricing -- supply and demand. Cost of living adjustments are really just a proxy for acknowledging that a prospective remote worker in Des Moines will have fewer local opportunities (lower demand) than a similar worker in New York, and so will be in a less favorable negotiating position. If remote work continues to grow (thus making demand between geos more similar), the differences between locations will begin to diminish, of course.

I sometimes wonder if I worked for a company that was fixated on cost-of-living-based salaries, and I decided to move up to Aspen (high CoL, but low demand for software engineers) if I would get a commensurate increase in pay. I'm guessing probably not. ;)

[paulgb]

Exactly this. We can talk all day about whether it's fair for companies to pay people in low COL locations less. But if a company can get the same work output from two different people at two different prices, that's an opportunity that the hidden hand of the market will find and close.

[alextheparrot]

Wouldn’t this mode breakdown when more than two companies want a given remote employee? Presumably companies paying Bay Area salaries and still making healthy profits means that they can afford to pay high salaries irrespective for talent.

This seems to be true insofar as companies can’t collude, either implicitly or explicitly, to suppress remote wages.

[bananaface]

This is something I've thought about a lot, and I haven't found a satisfactory answer to it. My hypothesis is that those employees who can exert that leverage probably do win, but they keep it under their hat, and so do the companies.