> But if the firm is purely remote, why tolerate this? Ignoring the issue of pay cuts for moves, why pay $200K for someone in SF instead of $100K for someone ju

> But if the firm is purely remote, why tolerate this? Ignoring the issue of pay cuts for moves, why pay $200K for someone in SF instead of $100K for someone just as good in Pittsburgh? Well, I guess it depends on exactly how fungible you think employees are. If you set a lower ceiling on the salary for a position, you're more-or-less excluding many of the largest concentrations of available labor from consideration. For that matter, for more senior positions, you're possibly excluding the candidates that have the most relevant experience (depending on your industry) wholesale. > The firm receives no benefit from the employee choosing to live somewhere expensive. The firm may receive some benefit from the employee being embedded in a community that has a high concentration of practitioners, but that's a bit speculative. When it comes to engineering (and software engineering in particular) many businesses are not shopping for the most cost-effective labor per-se, but for the best labor they can afford (or so they think). There are a bunch of reasons for this, some of which are based on myths or misunderstandings, but what it comes down to is that so long as there is an extant belief that better candidates are clustered in particular regions, you'll see a salary premium for candidates located there.