A bit late to this discussion, but I'll provide a comment from the employer side. Employment is a market, and it has market-based dynamics. Most of the develope

A bit late to this discussion, but I'll provide a comment from the employer side. Employment is a market, and it has market-based dynamics. Most of the developers here are (understandably) looking at this from a cost-perspective - "I should be paid what value I provide" etc. That's not how it works. Just like products aren't priced by what they cost, employers don't value developers by the value they add. Instead, developers are priced by companies at what the market will bear just like any other product. If a $40k salary in Bangalore will get them X quality of developer, and they need $120k in SF to attract the same quality of developer, then that's what the policy is. The policy might be disguised behind cost-of-living etc., but it's really market-based pricing. In the same vein, keep in mind that it costs a company more to hire someone in an expensive area. So if developer skill was the only issue, why would companies want to hire locally if it costs more? The answer is If developer skill was the only thing at issue, no developers would ever get hired in SF because there's plenty of great developers elsewhere for less money. The reality is that having people local adds significant value, all other things being equal, so companies are willing to pay more for local people.