> I get it if location based pay is used for jobs that require in person. But how can the employer have it both ways? Why would the employer want to subsidize more expensive lifestyles for a remote position?

Employers don't pay high because CoL is high; they pay what the market allows them to pay.

Does the market allow them to pay an employee less because he moved elsewhere?

Honestly, yes, because the number of FT remote jobs is not high, jobs are harder for FT remote people to find and land, and you are actually now closer to competing with offshore options, often augmenting an in-office team.

Remote employers only compete against local employers so yes.

Conversely, if more employers start hiring remote, we will have remote employers competing against other remote employers, which will increase compensation. And this is the reason I’m vehemently pro-remote.

People fear loss more than they welcome gain. There is a lot of demand for good engineering talent and there just aren’t enough engineers with these skills. While many people fear that remote would decrease salaries in high col areas, I believe the opposite will happen.

Of course the second order effects are somewhat difficult to predict. If you can get SF salaries in eg Ohio, it might reduce the number of people flocking to SF reducing the talent pool.

> Why would anyone accept a pay cut if their job is remote?

People are not accepting cuts and that is leading to positions being eliminated (layoffs) as employers are realizing they can pay sometimes 50% less than their high cost of living area wages.

Because the people making hiring decisions are mostly located in high cost of living areas, which is why I'm skeptical they'll succeed with it much longer.

> Because the people making hiring decisions are mostly located in high cost of living areas,

Cutting costs usually lets those people get bigger bonuses, so the incentive is towards forcing the issue.