Except for a couple of years I have resided mostly outside of California, but when doing consulting I have mostly engaged with companies in the Bay area.
In the past when I did pure embedded development I had to fight tooth and claw to get rates close to $100/hour, while at the same time iOS app developers or webdevs were starting at $120-$140/hour easily, even after the mobile app craze. Despite taking into consideration that I am both a hardware and a software engineer, and rates outside of California were much lower ($45-$70/hour at the time). Which was one of the reasons I pushed hard to find my clients in the Bay area instead.
These days since I have more experience and business contacts I have diversified into more complex projects that have embedded components and pay me better since they belong to regulated industries. Even now I work with full-stack software programmers in AWS/GCP cloud apps, React/Vue frameworks, modern databases and connected middleware that make around $200/hour. For comparison, in the last years I have been involved in the development of a medical device where I did the hardware design (MCU/FPGA, signal acquisition), HDL/firmware programming (Verilog, RTOS, Linux, BLE), technical host tools (C++, Python, Qt) and was paid $180/hour, and lately a mobile robot project where I did the hardware architecture, integration and system control loops (MCUs), and prototyped the high level software application (RT-Linux, ROS, Nvidia Jetson) for $150/hour. An acquaintance in the valley that was working for a similar project but entirely in the ML/CV stack was billing $270/hour. That may be a bit extreme example since ML is hot today, but nevertheless.
Yes, but certainly not in the Western hemisphere.
Basically, if there more customers but smaller orders, the wasteful overhead of customers reverse engineering the produce will grow. But then there's more incentive for HW companies to overtake the competition by offering better docs.