[MatthewPhillips]

The point still stands, unless you work for the handful (or less) of companies that pay FU money to their engineers, you're still paid equivalent of what a Dentist makes, and much less than what a good salesperson makes in a much much smaller city.

I think the answer is that the demand isn't actually very high. Programming is still considered a cost center for most companies, the quality of the product is determined by how much they are willing to spend on salary, not vice versa.

[paulbaumgart]

Judging from how much attention all the good software engineers I know get from recruiters and from conversations I've had with people actively hiring, the demand in SF/Silicon Valley is incredibly high. I have personally taken advantage of this demand through lucrative contracting gigs.

Sure, crappy companies in dying industries might not be able to compete, or might not even realize that they're failing to compete, but why care about them? They don't make the market for people who are actually good at software.

[svachalek]

I think you may be underestimating dentist pay:

http://money.usnews.com/careers/best-jobs/dentist/salary

There are a lot of cities listed with low cost of living and $250k median salaries.