[bane]

Whenever this topic gets brought up, it invariably is seeking big-city pay in small-town locations.

The more important question is this: suppose we live in a world where all remote employees make essentially the same. Why wouldn't an employer simply choose to pay the absolute bottom rate salary for an employee living in the absolute cheapest possible location and not pay more for people living in significantly more expensive locales?

It can also be very enlightening to look at the US Government GS Pay schedule, which sets a base salary at specific employment levels, then has a page of secondary schedules with "locality pay differences" depending on location. For example, a USG in NYC makes about 34% more than the base salary for living in Podunk, Mississippi.