I have to wonder if this will make it so software engineers are expected to work for the salaries of the lowest cost of living place in their respective country. Leaving cities to only be a place where PMC can live.
AFAIK, in bigger (more populous) countries, it seems that the pay is going to be according to the average for the area, scaled. This is giving countries in Eastern Europe a bit of an advantage. In my case (in Bulgaria) while there is a big difference between living in Sofia and a smaller town, a lot of companies are opting to pay the same regardless of which town you are now working from. And I've already seen, pre-covid, people from western europe coming to work and live in here and now that could become even more accessible.