In the long term with enough companies doing remote work though, this starts to blur the boundaries between job markets and we might expect salaries to start to be affected by other cities, in the same way that different suburbs within a city share the same comp rates.
How do you decide what a software engineer salary (since we're talking about pure skill and not location) should be? Is it $30K, $80K, $150K, $400K?
Do you see the problem and why I don't think this will happen?
If Facebook will now hire permanent remote employees anywhere with excellent internet they are now hiring in the area. They pay new grads in SF $200K a year. If they pay $100K for people with seven years of good experience, Seniors, in Vietnam they will have them all in under six months. Even at $50K the market price of devs will get bid up quickly.
No, but FAANG and other extremely profitable companies might try it. If you offer Bay Area salaries to everyone who’s currently in a top 20 CS PhD programme and tell them they can live wherever they want you’ll get a pretty good yield. Even better if you make a standing offer to everyone who completes X hard classes on GA Tech’s OMSCS. This wouldn’t be worthwhile if the productivity differential between remote and office was high enough but in the long run wages approach the marginal product of labour absent employer collusion. Might take 20 years but eventually the top end of the market will be getting comparable numbers whether in NYC or Bangor, Maine.