Earlier quoted context omitted.
The problem is that if (even just keeping the discussion to the US) a company pays, say, Chicago wages everywhere, that means they effectively probably can't hire anyone in the Bay Area for example. Of course, a lot of companies already basically don't try to salary match the hire who has an offer from Facebook or Google in SV and wants to work there.
Maybe this is overly simplistic, but won't this all work itself out over time? More companies refuse to pay inflated SV salaries (note: most companies in the world already do not employ people there anyway), so some of the concentrated SV talent leaves for other places like Chicago where they can still get a sufficient wage relative to the cost of living. This continues for a while and eventually the COL in SV will s…
I'd argue it sort of has played out. A handful of companies are willing to pay almost anything for the people they want, especially if they're located in SV. Pretty much everyone else has shrugged their shoulders and moved on. And it works because 1.) Hiring is a very inexact process and 2.) Not everyone want to work for one of the big tech companies for various reasons.