> if you give $5k to someone living on $20k vs $200k annual income, the $20k person is much more likely to spend most or all of that $5k on food, housing, etc.

That would normally be the case, but I would argue that salary and housing has a strong connection in places like SV. People need to get a certain salary to be able to stay (and start a family) in the Bay Area. Which means that people have a high incentive to increase their salary and that some of those who don't have to leave. As overall the people who stay have more and more money the cost of housing increase, in turn giving people even more need to increase their salary.

That would all normally stop at some point, but since so many wealth companies centralize in the Bay Area the spiral continues.