Investors may choose to invest with a company in a certain city, like Nashville or Berlin or Singapore, because wages are low. So if wages become a problem for

Investors may choose to invest with a company in a certain city, like Nashville or Berlin or Singapore, because wages are low. So if wages become a problem for the company, the investors stop being interested. There won't be money available to raise wages (for that, the investors will just go back to markets like NYC, Boston, or SF that they trust more). So from birth, companies based in these areas are predicated on the idea that wages must be low -- that's what makes them attractive to investors -- and as a result they really are not recruiting good people. The whole thing basically amplifies the casino effects in start-ups. You invest in Berlin/Nashville/Singapore start-ups because it's an insanely cheap scratch-off ticket that costs you mostly nothing, has very low chance of striking it big, but offers you entertainment, or bragging rights, or something else, as an investor. Companies in these areas will not be in a position to raise their wages to a truly competitive level for very long periods of time (most won't live that long anyway). So by agreeing to work for them, you are simply resigning yourself to a permanent reduction in real wage (i.e. after accounting for cost of living). Not to mention, for international workers anyway, adding visa risk, tax complications, equity complications, etc. For a very talented developer who can earn far enough about market salaries even in NYC or SF so as to live a comfortable life in those places, it would only make sense to bear all these risks and join a firm in Berlin if you were being paid a premium -- i.e. that your wage in Berlin was even higher above cost of living than what your ~ $180k salary would be in Brooklyn -- and you should not at all consider it if someone starts conning you with arguments like, "but it's so much cheaper in Berlin ... and you can drink beer in the park and watch Bayern or Dortmund play here twice a year, go to Berghain on the weekends, etc. etc." (unless, of course, your utility function responds more to beer and soccer than to money).