> An optimization coming from an engineer in Taiwan saves you the same money as if it comes from an engineer in SF but the SF engineer gets 8x the reward for doing the work.

Suppose you have a thousand engineers and those thousand engineers generate ten billion dollars in annual profit. How much do they each get paid? They amount they're worth? Nope, the amount they'll accept.

If you live in the US and you have the wherewithal to be an engineer then you could also have been a doctor or a lawyer or some other high paying occupation. And many of those can't be fully remote because they have to see domestic patients or interact in person with local courts or clients. Which means that if you want someone in the US to be your engineer, you need to pay them an amount that makes them want to do that instead of choosing one of those other occupations. Whereas the one in Taiwan doesn't have the option to become a doctor in San Francisco and is therefore willing to accept less money.

So why don't companies just hire exclusively the people in Taiwan? There are all the usual reasons (time zones, language barriers, etc.), but a big one is that they need a thousand engineers. So they and their competitors hire every qualified engineer in Taiwan until Taiwanese engineers reach full employment, at which point the companies still don't have all the engineers they want. And when the average engineer is making the company ten million dollars, paying San Francisco salaries is better than not having enough talent.

So then why doesn't every smart person in Taiwan become an engineer? Because the companies hiring engineers there are only paying Taiwanese wages, and then they're not any better off to do that than to become a doctor or a lawyer in Taiwan. And if they would pay higher wages there, the local economy would have to start paying local doctors and engineers more to keep them all from becoming engineers, and then you would only get a modest increase in the number of engineers for a significant increase in compensation. Which is still what happens, but only slowly over time, until the wages in Taiwan ultimately increase enough to no longer be a competitive advantage. And companies don't want to make that happen faster because then they'd have to pay higher salaries in Taiwan.