Markets work by paying for value created. I’ve tested extensively, and found that I’m equally capable of writing code on a beach in Thailand as in a felt cube in California.
I’ll grant that there is a Cost of Living difference between those places, but I would prefer that difference to be captured by me rather than somebody else’s company. It’s me doing the work and creating the value, so that seems reasonable. If you want to purchase my services, you get to pay my market rate. End of story.
Never drop your rate when working remote. That should probably be written in the article we’re discussing.
That is not completely true. Market pay also depends on demand and supply. When I was 19 I got 20 Euro an hour (tax free!) doing some CAD work not because of my skills (they were pathetic), but because a large project of a small company depended on some CAD work being done and he (the boss) couldn't find anyone to do it (part-time, for half a year only, very simple work on a shitty laptop were some reasons why I can imagine he had problems). As a test I was asked to draw a line and give it a specific colour in AutoCAD, that was it!
A bit of advice: Those cheap guys are not your competition, and those bargain hunter clients are not the ones you're trying to land. Let them all race to the bottom all they want. Maybe one of them will find a dev who doesn't know his value yet, but the rest will get their money's worth. It doesn't concern you.
There is only one of you, and your rate is the same whether you're onsite in the Bay Area or working remote from anywhere else you choose to be.
That mindset has served me well over the years. I'd recommend taking it on board.
Simplified, the counter argument appears to be:
"If a company has the leverage in any capacity to exercise its dominance over a potential employee—to extract as much value from them at the lowest possible financial liability—it should in any case attempt to do so. It would be absurd to do otherwise."
Personally, I can't abide by that—especially when the only basis is locale—and no matter if they bring the same value to the company as a local six-figure-salary employee.
It's better to know the rules of the game otherwise you'll just end up being played.
I've been witness to this first-hand. Of course, it's only anecdotal, but just the same it's informed my opinions.
Though you're right about your last point absolutely— it's often pretty safe to assume they're (especially larger companies) operating under the pretense we're both referring to.
The "labor market" is a pretty good example of how markets don't work. Workers are pretty much forced to participate in the "market" because they have to eat. This alone is a ridiculous distortion of market mechanisms. There are also huge information asymmetries regarding salary levels.
A remote only company playing the local income game is a major red flag for me. It's basically an employee caste system at that point, with second class employees based solely on their physical location.