One possible explanation is that the market rate for a developer in two different cities is different, so said company has no choice but to pay those two develo

One possible explanation is that the market rate for a developer in two different cities is different, so said company has no choice but to pay those two developers different salaries if they want to hire them at all. It's simply supply and demand. An engineer in SF won't work for less than 140 (not when there are so many other jobs that will pay that) while an engineer in London will. So why doesn't the company just pay the developer in London (or Hanoi) the same as in SF? Well, why should they? Reducing costs is the rational course of action; regular people do the exact same thing. If anything, you're making an argument against companies hiring from SF. If two developers, one in Hanoi and one in SF, truly do provide the same value, then why on Earth would said company pay almost twice as much to hire the one from SF?