[renewiltord]

> Regardless, in those cases I’d still expect a competitive market to reach some price convergence, holding all other factors constant...

This is the crux of the problem, of course. There is no convergence because the only factor isn't that the SF engineer is competing against engineers worldwide. The price you have to pay is the minimum to prevent someone from doing the other thing. And so, even if Google is the only one in the Bay to offer higher to work there, you need to pay as much (in some terms, not just monetarily) as Google to get an SF engineer.

That makes sense to me. Local large employers can have an effect on local hiring costs, even for employers not stationed there.

It's not Baumol's Cost Disease, but there is an analogous mechanism there.

[empalms]

Good points. It’ll be interesting to see how other major (and growing) SW employers treat WFH flexibility and pay in the coming months/years.