No, you are compensated for how much someone doing the same work would demand.
Like the original comment said, most programmers probably need to read a book about negotiation so that they can clearly communicate their skills and why they are not easily replaceable. Once you're established as an unique professional with an unique skill mix, you'll be compensated for how much the team to replace you would cost.
A candidate can't ask for an obviously uncompetitive salary, but they can ask on the high end for what a company expects to pay for an employee.
I don’t understand why pepple keep repeating this. Obviously we are paid what they can get away with. We’re just trying to change what that is. If everyone starts accepting location based pay, we’ll be fucked in the long term.
Or, well. It’s strictly better for me if I get paid SF wages anywhere in the world.
There is, obviously, incredible incentive to defect. If you're going to demand 100% of SF wages, I can improve my lot by demanding 99%. Then the next SWE can undercut me at only 98%, and so on.
Setting aside that obviously, on an individual level, an employer will typically want to pay you as little as they can get away with, this isn't how location based pay works at a macro level.
Saying "You can work from anywhere you want, but we want to know where that is so we can pay you more" is an equally (in)valid statement since it's about pay distribution.
I'd argue that this isn't really what location based pay is worried about. In this case, you're being paid specifically be close to some location or collective building because your employer values that collectiveness. That's okay. That's the company communicating "we value the ability for you to be here, in person, with this group of people - so we're going to incentivize it".
The problem with location based pay is when an employer says, "You can work from anywhere you want, but we want to know where that is so we can pay you less". You provide them the same value from mid-city America as you do in rural America. They simply want to pay you less when they can.