Yes, that's correct. But the question being asked is why the location changes the $X's there. I don't know that restatement of economic generalities helps unless you're going to apply them to the dynamic being asked about.
Just because it takes some time for the market to price the changes it doesn't mean it won't do that. Enjoy the initial boost in discretionary income but prepare for having to negotiate lower compensation down the line (or, more likely, not getting any increase in compensation for a long time).
If the buyer's prediction is true, then the seller will accept (maybe not in individual cases, but averaged over entire workforce). If the buyer's prediction is false, then sellers will opt to sell to other buyers offering more.
When there are 10 Million people living in dramatically cheaper COL centers they (a) can survive on much less, and (b) are all competing for 100 jobs, driving the supply curve way down.
>> restatement of economic generalities help
because this is a textbook example of why these generalities hold true, but only in really basic, aggregate cases.
Its very imprecise to base salary on location, but if remote were just as competitive as in-office, you wouldn't hear people asking to get paid the same when they go remote