They can still hire devs. They just need to pay more. Total comp is not adjusted for cost of living for doctors, salesmen, traders, bankers, attorneys, and managers. Why do you expect it to be adjusted for software developers? This is less than intuitive for me.
It's a way of justifying keeping salaries as low as possible for engineers, but somehow managing to cough up more money in some locations. An equally good engineer in Chicago should be worth the same amount as an engineer in SF, but they're paid less... simply because the employer has more negotiating power in both cases. In both cases, the employer pays enough to give the engineer a reasonably good living for the local cost of living, because that's what's needed to incentivize them to work... a natural minimum incentive. If engineers demanded more, they'd get more.
Yes, and it's the same point I'm trying to defend against a communistic idea of some kind of universal "value" of labour which is equal regardless of location or circumstances.
Some people think that employees should be paid somewhat proportionally to the amount of value they provide to their employer. If you accept that, then a good engineer should always get about the same amount of money, regardless of the cost of living, because they always produce a similar amount of value for the company.
Value is subjective: it's determined as agreement between seller and buyer. Engineer of the same ability is more valuable for an average SF company than an average Chicago company.
I don't know if that is true. A cursory glance at compensation statistics seems to indicate wide regional variance in the compensation in all these professions.
And, for me at least, intuitively it makes sense as well, but I don't want to argue intuition here.
Your causality is backwards. San Francisco doesn't pay high salaries because the cost of living is high; if that model obtained, San Francisco would immediately turn into a ghost town. The cost of living is high in San Francisco because of the high salaries.
1. There might be a feedback mechanism between the two since high salaries could lead to high cost of living which in turn means that companies have to offer higher salaries etc.
2. The higher salaries don't explain the entire cost of living story since cost of living has risen faster than salaries.
3. Cost of living -- primarily the cost of housing -- seems to spike after certain events. IPOs, or other large liquidity events.
Arguably the effect goes the other way: engineers are more productive in SF, so they're worth paying more in SF. (If that weren't the case, then you wouldn't be able to pay engineers enough to want to live there while still making s profit.)
So the GP's policy would still fit the spirit of the H1B program, which is to allow slots for high-output roles.
The reason I gave in the post: if it were not the case, you could not bid a high enough wage to both a) make a profit and b) produce a discretionary income attractive to engineers.
If you want a further explanation of why that is, then I would say that it's the proximity to related talent and investors adapted to this kind of work.
Edit: In case it wasn't just a clever attempt at synecdoche: it can't be proximity to the Golden Gate bridge per se that increases productivity, because the North Beach/Marina/Marin tech jobs pay less than SoMa and SV tech jobs.
