[dragonwriter]

> Companies doing this are shooting themselves in the foot by not letting the market dictate pay.

Companies doing this are letting the market dictate pay: the global market. If there is no particular need to have people working in a particular place, there is no reason to pay a premium to get labor in HCOL locations (which, the fewer employers are paying a premium to get labor there, will cease to be as much HCOL areas, too.)

> They either will waste a ton of money by giving everyone Bay Area-level pay, or will just be unable to hire in high cost of labor locations without compromising talent quality.

If employers stop paying a location premium when the premium location provides them no added benefit, people won't be able to command premium pay to live in premium locations.