Much of the difference you have to pay compared to what someone in another country has to pay is due to taxes or subsidies. Expats in the Philippines get taxed so heavily on bringing their motorcycles from home they will often tear them apart and ship them to the Philippines in separate boxes and declare those boxes as parts. Electronics is also heavily taxed here. Blame the government.
We also get volatile currency fluctuations, though as a US citizen, it goes to my advantage. The USD is at an 8 year high against the local PHP. This is the work of markets. We probably don't know why prices go up and down, but the changes are being blamed on the new president here. People see the USD as a safe haven. Now the US has the possibility of Trump, so who knows what happens there.
> Forgot to add: my salary in a it field is 1/3 of the same guy in the USA, yesterday I heard Trump promise to bring the jobs back to USA, why someone would pay 3 times for (almost) the same thing? I would not. I may pay 10 or 20 for a commodity but 3 times is too much.
Software developers in SV make significantly more on average than developers in the middle of the country. This works because these people create X times their salary in value and hiring is hard. As people make more money, the demand for housing causes rent / buy prices to skyrocket. As living expenses rise, people need to make more money just to survive.
On the other end are businesses with razor thin margins with skill requirements being little more than showing up to work.
You don't need to live in SV to get a well paying job (but location does help). Make sure that you are operating in an industry in which you have some ability to call the shots on the money you are making.