I'm not sure how reliable indeed is but doing a quick search shows that the average salary for a Web Developer in DC is $105,000. It says the average for a Web Developer in San Francisco (the most expensive city in SV) is $114,000. Now that roughly $10k difference could seem like a lot to some but they'd be mislead to think that money wont get eaten up by SFs extreme cost of living.

>...your company in say DC then why would you continue to pay your engineers SV-sized wages.

Because you value great employees? I mean think of it this way. A lot of people can't just pack up ship and move to SF. But a lot people can! Companies keep their salaries on par with the valley to keep up. Granted the numbers aren't a science. It is hard to compare salaries in different areas but It has been my experience that SV wages are not that much more than any other city in the US.

> You'd be amongst the wealthiest people in DC if you were paid what a typical engineer is offered here

This is just blatantly false. Do you know how much government workers and politician minions make? It makes engineering salaries look laughable.

1.) http://www.indeed.com/salary/q-Web-Developer-l-Washington,-D...

2.) http://www.indeed.com/salary?q1=Web+Developer&l1=San+francis...