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I agree it's unusual that an employer will cut someone's salary - but there's another way to decrease average salaries.

If the cost of money rises, companies that are only viable while the cost of money is low go out of business, and their employees' salaries drop to zero.

Absolutely spot on

I don't know about SF, but it certainly didn't stick in London (UK) post the dotcom bubble. Many people ended up either with no work in tech or taking voluntary pay cuts, and the hourly rates for contractors dropped dramatically only to get back to previous levels in GBP terms 10 years later. Many tech workers left London because they couldn't afford to live there any more. New properly developments around certain parts of London didn't find tenants, rents dropped making it more attractive to buy a few years later.

They are sticky, but part of the rate of change is driven by people moving between companies and getting raises and such. That will just happen less and attrition over time will do the rest.