| Salaries are based on the market economy of supply and demand. Salaries for a specific role are different in one location over another because that is what the market is in each location. If you want developer salaries to be the same in all locations for the same level of work for reasons of fairness and anti-discrimination, you should ask why salaries of developers are higher or lower than other roles. Developers get paid highly because of supply and demand. Why not advocate for all workers, regardless of role, be paid the same - this would also be fair and anti-discriminatory. It seems we want to benefit from the market economy on one side and then want fairness on the other side. The logical conclusion of this kind of reasoning is communism where all workers at a company are paid the same, regardless of role. We know how that worked out. If all developers, regardless of location, were paid the same, companies would much rather hire all their developers in a single location. Why bother hiring in locations far away? Jobs would have never flowed out of high paying locations to lower paying locations. The Bay Area has the highest salaries because Silicon Valley has had many years to develop and the vast majority of tech companies are based in the Bay Area. Many companies are started in the Bay Area because people who work together in one company often break off and start another company. Many people at these successful companies have become wealthy and this has driven up home prices. This has made the Bay Area one of the most expensive places to live. Other workers cannot afford to live in the Bay Area and so there is a shortage of labor. This drives up the cost of every thing, including restaurants, groceries, and personal services. If the Bay Area does not add substantial housing, it will continue to see companies move to other metros. In the US, salaries are different based on metro and state and are based on the market economy. Companies move to offices to particular metros if they is a healthy supply of workers and supply is greater than demand so that it is more cost effective. This location competition is healthy. The role of any government, whether it is metro, state or country, is to create thriving economies so people want to move to that location. This means investing in critical mass in particular industries so many companies in that industry want to locate there. It also means ensuring other costs are low. In the US, health care insurance cost between $24k and $36k/year for anyone with a family. This is higher than the full salary in other countries. If the US does not figure out how to solve its health care costs, it will continue to see jobs leave for lower cost locations. |
With fully-remote working, the demand isn't as concentrated, so supply need not be as concentrated either.
As someone not currently living in the Bay Area, or London, or another tech hub, I'm quite happy not to be paying the cost of living there. And honestly I don't think it's fair that people who live there should be better compensated just because they decide to live somewhere expensive. But I understand why it happens, because when companies hire specifically in a tech hub there are lots of people willing to work with them but only if their pay is higher. It's a vicious circle for employers, a virtuous circle for employees, and only sustainable for as long as productivity remains above cost. It's not built on a stable economic foundation.
I don't want to accept lower pay for the same job, which may mean that I don't work for those companies. That's the market at work :). On the other hand, if a company wants to employ folk to be physically present in London, they're not going to want to employ me. While if a company is willing to pay the same to everyone, they'll get fewer people in London and more people outside London, and they might even be the same people just dropping their commute :).
There's enough global demand for Software Engineering to drag everyone up. It is universally the case that if you pay peanuts you'll get monkeys, but paying an equal wage for equal work benefits the company and wider society and I don't particularly care if that's lower than I might get if I was willing to work in London (or the Bay Area), so long as I'm not required to work in London (or the Bay Area).