When you set up a company in Toronto or New York there are clients at every corner, lots of industry meetings, and a large pool of developers to draw from as yo

When you set up a company in Toronto or New York there are clients at every corner, lots of industry meetings, and a large pool of developers to draw from as you grow. When you set up a company in Timbucktoo you get none of those things. That means that a company at the margin is happier to pay for a developer out of NY, so there is increased demand in NY than there is in Timbucktoo. This drives up salaries in NY. > The only reason salaries would be depressed in backwoods places would be if the cost of living was drawing in so many workers that it drove salaries down. Remember there are two curves, supply AND demand, and they resolve simultaneously. Workers could be leaving the region and salaries could still be going down, provided demand was decreasing as well.