Yep. With these "cost of living adjustments" it's almost always a better move long term to live in the higher COL area, especially if you are living inexpensively and saving the vast majority of your money. I save more per year than I would gross working as an engineer near my hometown...
Although I will say, person B in your scenario has potentially more upside on their housing equity, and they do potentially get a higher standard of living short term. Of course, there are aspects of standard of living such as public transportation, good public schools, people in your area you'd like to date/be friends with that person B may not be able to buy.
99% of the things I want to buy are dirt cheap. The other 1% are expensive to the point where they are unaffordable for almost everyone. Think about something like a $120k 3d metal printer. Those things are actually possible to buy if you move to SV.
I’ve done the budget calculations based on my own personal spending and found that outside rent, the majority of what I spend money on costs essentially the same no matter where I live (if you normalize out taxes).
In the US, state and local taxes can cause a huge variance. Certain states are in debt for multiple tens of thousands of dollars per taxpayer more than other states, and those taxpayers will have to pay far more for debt service.
This whole FB thing is actually more nuanced than people talk about:
1) It's only for senior engineers
2) US only right now.
Essentially, this is a play to increase senior retention. California is pretty much unaffordable for most people who weren't pre-IPO or very good at saving.
Therefore, the trend is for more senior people to leave, and move to cheaper places. By allowing remote for seniors, FB have a good shot at keeping people for longer, which is incredibly important for large engineering driven tech-co's as the churn in tools/frameworks/approaches is really high, and keeping people who remember Tool version -2 is super high leverage when they come to consider tool version + 1.
I've always assumed these companies liked the senior rotation in order to keep seniority (and wages) lower. It also likely has the effect of keeping average age lower, which would make for an interesting disparate impact lawsuit.
I foresee the bar being raised for those wanting to enter a high COL city in the future. I’m already noticing an emphasis on companies wanting to hire more outside of the Bay.
Although I will say, person B in your scenario has potentially more upside on their housing equity, and they do potentially get a higher standard of living short term. Of course, there are aspects of standard of living such as public transportation, good public schools, people in your area you'd like to date/be friends with that person B may not be able to buy.