Well yeah, that's the logical conclusion of this policy. Anyone who thinks Bay Area salaries are going to be standard nationwide is delusional. That's not how supply/demand works.
Sure, the companies tried the standard approach of just secretly agreeing not to compete with each other for talent, but the DoJ didn't care for that, and so they just do the other thing: pay as much money as is necessary to get the folks they want.
Apple makes about $435,000 in profit (not revenue) per employee, including non-technical employees. If they think that they need to pay staggering salaries to programmers to keep a good thing going, they will absolutely do it. Would they like to pay their programmers a third of what they're paying now? Totally. Would such a salary be fair? Totally. But those programmers would just call a Google or Facebook recruiter and be out the door the next day.
There is a reason why software is %20 of the economy and most economic growth in the USA now and why engineers are paid a lot and I believe they are correlated.
I always wondered why the FAANG companies don't move their main campuses to somewhere with a lower CoL (call it CoL') so they only need to pay $(CoL' + X' + Y) to keep the employee. Paying X' (where X' probably less than X) because they're no longer in local competition with the other companies. I wonder how long it would take to recoup the cost of moving the company in savings on compensation. There are countless places which have better quality of life than the Bay Area, while also having lower CoL. I chose to move to the Bay Area because Y was greater than what I could get anywhere else.
Or in the UK train drivers ;-)
Seriously, what are you expecting workers to do exactly?
The only difference is the benefits of non-remote tech-hub work that have been driving the high wages in tech - concentration of talent, face-to-face communication/team-building, advanced urban infrastructure - are now gone. So tech workers will have the same amount of company choice, but can no longer benefit from tech hubs; tell me why companies are going to continue paying the same high wages again?
Concretely, if your work adds $300k/year to company revenue, it will at most pay you that much.
Of course, it prefers to pay you less, and to get close to that number it's best to be part of a big enough labor market that you can get job offers from several employers.
Here's the thing: In a mainly remote programmer labor market, that we seem to be entering, all employers in the entire US are in your local labor market, so that should work out fine.
What I just described is "supply and demand", with a bit of detail.
The bigger the labour pool, the worse deal you are going to get. You're now competing against the guy in Nowhere Town, this guy can do your job and he's willing to do it for less because he's never experienced an expensive reale estate market.
I run a small consulting practice. We are highly skilled and very experienced. We can often charge much less than our competitors because we don't have the overheads our competitors do. A 1 million dollar deal for my practice is worth a lot more than a 1 million dollar deal for Accenture. We can go down to 700,000 and still have over 90% profitability, Accenture will walk away at that price point because it's not worth their time.
If this was true, big cities would pay the lowest wages, while remote rural places would be where to go for really high pay.
I think the main thing missing from your model is that the employer pool is also growing.
The main thing missing here is that this is the tech industry where there was previously no demand in rural places, which makes the low supply in rural places irrelevant. Before the aggressive lockdowns across the country, tech companies didn't care about rural areas because the increased labor pool wasn't worth the compounding gains you get from a concentration of talent, face-to-face communication, and advanced urban infrastructure. Now they literally can't have that, they will give you a worse deal because they have access to a larger labor pool.
It's kind of absurd to suggest that increasing the labor pool alone will lead to higher wages. It's strictly worse for city dwellers who already benefited from an increasing employer pool, which is now offset by an increasing labor pool.
I think you’ve made a bigger over sight here though:
> In a mainly remote programmer labor market, that we seem to be entering, all employers in the entire US are in your local labor market, so that should work out fine.
What you would expect from this is a new equilibrium prices that is a) lower than the current highest paid region, and b) higher than the current lowest paid region. Which is a situation that doesn’t benefit anybody currently working in the large metros.
A worse (but likely inevitable) outcome would be if wages started trending towards a price somewhere in between San Francisco and Manila.
Now that supply is spreading across the country because remote work is easier, but that doesn't change the number of developers that these companies are competing for. I doubt that the supply/demand curves will move much at all.
This is a wild statement and I would guess it is coming from someone who hasn't spent much time professionally outside of tech hubs. There are tech jobs and competent developers everywhere. They just exist in a higher concentration in tech hubs.
There's many great developers outside of SV but they're typically doing boring Windows-centric finance or engineering support work.
Even ignoring the silly claim at the end, what you say isn't logical. New developers aren't born in SV, they move there because that's where the jobs are. If they no longer need to move there for the good jobs, they won't.
This statement supports my point. A large proportion of devs currently live in a tech hub. They moved there because there was opportunity. Telling all the developers that the opportunity will come to them does not magically change the number of developers. So if demand for developers hasn't changed, and the supply hasn't changed, why would salaries change?
The only way the number of available devs changes is if some new untapped supply exists outside of the tech hubs. My argument is that it does not, the majority of devs that could already moved to a tech hub or figured something out.
Maybe as a rough generality. 1/3 of the developers I know were born in SV.
It’s probably not hard to guess the confounding variable.
SV is a 2m+ area filled with local schools, where many of the parents are developers and highly supportive of the education to be a developer. For someone to say “no developers are born in SV” is bewildering.