Then why pay $200k for a software engineer in the valley when the same talent can live outside of the bay area and can do with 1/3rd of the salary? The question I have is what portion of the $200k salary is 1) due to the raw talent of the individual 2) because they live in the bay area.
Bingo! I often talk about how you can rent a 3BR apartment in my home town (Nowhere, Michigan) for like $900. This is true -- I've verified it recently. The drawback is that you have to live in my home town. I can certainly see companies wanting to pay less based on CoL simply to make the bottom line better. Given the way capitalism works, I'd say this is a near inevitability. The end result will probably be that the…
... that want to live in NYC or SF. For everyone else, who doesn't want to live in places like that, this is awesome. (And that's a word I never use)