What's happening here is disintermediation - the employees in SEE and EE have realized that they can cut out the middleman (their local employer) and work directly with foreign clients. This makes the lower cost of living the employee's, rather than the employer's, competitive advantage. It also means that these local employers now have to compete on two fronts - for labor with their foreign competitors who have greater purchasing power and for gigs with their former employees who can offer the same services but with lower overhead.

The next step will be that these newly minted freelancers will realize they can charge more and raise their rates. Lower CoL is a huge advantage here - you can wait for months for the right gig to come along while your competitor in NYC can't. In the end, I think the rates in the WE and the US will drop all around the board while simultaneously rising in cheaper areas until an equilibrium is reached.