Startups pay a lot. So do smaller companies located in SF. You have to: otherwise you lose employees fast.
But I guess it works, as long as there is a sufficient supply of bright-eye kids who were led to think that living with roommates after you've graduated from college is acceptable it all works out.
You realize that a lot of folks who work in SV are immigrants who come from situations much worse than this, right?
Even for Americans: please don't blame the young for the shitty economic situation that they've inherited. I get your point that they shouldn't put up with that lifestyle, but what do you expect them to do? Just not move here?
Once they're here and see that you can demand better compensation, they do move up the ladder.
And there are lots of places in the US where economic situation (at least if you're IT-related) is quite good. E.g. in Chicago you can have a job, and buying your own house a few years out of college is perfectly doable. And you still have access to world-class culture, entertainment, food, what not. Really, in Chicago I have never heard of anyone working even in some boring corporate drone developer position who had to live with roommates. This is something students, or day laborers do. In the Valley I regularly met grown-up people working as software engineers for FAANGs who were bunking with roommates.
Sure, if someone likes it, all the power to them, but is it really the best option for everyone?
Only in the SV bubble could one think that "disrupting the laundry pick-up industry" or some "uber for dog walking" is something world-changing
And COL-adjusted salaries in SF outdo other cities only if you happen to be at one of the FAANGs or something with particularly generous VC backing. But even for people who want to work there, there aren't enough FAANG jobs for everyone (and not everyone wants to touch them with a 10 foot pole). At the vast majority of companies pay isn't anything like that.
Not that weather in SF was all that great either.