So let's assume you can reduce your rent from $50k/year to $20k/year.

That's a saving of $30k/year, or maybe $40k/year before tax.

From what I understand from reading comments here, salaries in places with lower cost of living are not just $40k/year less, but much much less.

And for those earning more than $150k, the math works out even more in favour of the Bay Area, as the % drop in salary goes up with salary, whereas the $40k rent difference doesn't.

Rent is just the tip of the iceberg, you also have higher taxes, higher entertainment costs, etc. Also, even with a >$200k salary, buying a decent home without a brutal commute can be hard.

If you don't mind living in a rented room or commuting >1hr a day and shop exclusively at amazon and costco, the bay area is a great opportunity to save money.

"Also, even with a >$200k salary, buying a decent home without a brutal commute can be hard."

If you're a software your aim is to buy a decent home in $US_CITY at some point, the easiest way to come up with large downpayment is to work in the Bay Area for a few years. You don't have to live in the Bay Area forever.

You can do that. But to a large extent you are giving things up for that money. Being close to your family, or cultivating friendships have value. So does many other things. I get why people do it, especially since alternatives hard to come by, but it is still a bit of a tragedy. Or at least not ideal.

Rent is the iceberg. Taxes are not much higher than many other places, entertainment costs are very similar to other locales. Cars, computers, international travel, groceries, cost about the same.

State and municipal taxes are much higher than a significant number of USA states and municipalities. Federal taxes are progressively based on income, which is higher in the Bay Area but for this reason its contribution to overall welfare is not that much higher.

True, but those are all marginally higher, not substantially higher. Rent is the only thing that is really high, taxes are kind of meh in California, heck I moved from LA to Seattle and saw my tax bill just shift around a bit.

For the $4300 you mention, I seem to be able to find real houses (1500 sq ft and 3 bedrooms) in downtown Mountain View, presumably a premium location if you work at Google for instance:

https://sfbay.craigslist.org/pen/apa/d/old-mountain-view/667...

https://sfbay.craigslist.org/pen/apa/d/pet-friendly-house-nr...

Sounds good enough to start a family to me.

And of course, once you become a little bit more senior and your salary goes over $200K, you won't mind spending so much on rent and will start saving significantly more than elsewhere.

It's possible that there is a natural filter in play here, with the people whose salary is not increasing significantly basically forced to leave.