There are a few factors at play here that have led to high salaries for engineers.

First, the aforementioned funding bubble.

Second, a correction to depressed wages due to collusion between the big tech companies.

Third, increasing demand for tech workers in historically non tech sectors (Eg. Home Depot has mobile apps for home improvement).

I have no idea what the attribution split is. But I'm fairly certain wages will be propped up in the event of a funding collapse.

What? Where are people going to get the money to pay higher/equivalent salaries if not funding?

The non-tech sector seems perfectly content to pay engineers 60k under constant threat of outsourcing. In the absence of Silicon Valley competing for talent they'll get away with less, not more.

Silicon Valley won't disappear.

Google/Facebook/Apple/Microsoft/etc have been and will continue competing for talent. 2005 to 2009 was hardly a time of "easy money", yet the big tech companies still had to resort to collusion to combat demand for engineers.

What? 2006 was the heyday of Rails and the gazillions of startups built on it.

Yes, but not the hayday of crazy series D rounds.

EDIT: Easy data point, YCombinator was only a 20k investment back then. Very different story of access to funding.

That's a great question. There's always going to be more money in causing suffering than fixing it, so maybe all of this is just inevitable.

>There's always going to be more money in causing suffering than fixing it

How?

I can say this much -- I have exactly one friend who also works as a software engineer. The rest of my friends are activists, students, service industry workers and non-tech entrepreneurs who are getting absolutely crushed by the cost of living in the Bay Area. A massive, "catastrophic" crash in the tech industry would, on balance, be great for all of them.

> who are getting absolutely crushed by the cost of living in the Bay Area

Outside the bubble, New York has always been like this, and it's not because of the tech industry.

Like the Bay Area, New York appeals to a lot of people, and with the appeal comes competition for housing. The Bay Area is a desirable place to live -- the weather is always excellent, there's plenty of stuff to do (try finding a mountain to ride your bike up in New York City), etc. People pay it because they like it. I don't think it's because tech is there.

I've only lived in the Bay Area for 6 years and I've watched it change dramatically for the worse. My friends who have been here since the 90s talk about it in biblical, apocalyptic terms. It isn't "just like that". Something fundamental has changed.