If you don't want to do build interesting software products you shouldn't be in the business because there are other ways to earn as much money without the huge time sink and stress that comes from how 9 out of 10 projects are run inefficiently with insufficient staffing. Suicidal depression, federal prison, night terrors prior to leaving the business, broken marriages, and similar things are side effects that go with it.
When you do because it's a passion, you might get lucky and be able to kick-start your career in Austin, Boston, Boulder/Denver, Portland, or Seattle but the opportunities there are limited. If you really want to grow you need to work on interesting projects with competent people who've done similar things before and there's only a good selection in the San Francisco Bay Area.
When you aren't content with room mates, $80K isn't a living wage in the Bay Area. Especially in an unstable economy (other places $25-30K in savings will pay your mortgage and even restaurant bills for six months without a pay check). Especially if you plan on reproducing and intend to send your children to a decent school.
When I bought my first 3-bedroom town-house with 600 square feet of basement shop space an attached garage for $160K within walking or cycling distance of anything I wanted in allegedly expensive Boulder CO, $80K was comfortable salary with room for retirement savings, 3 year old used car, and week long annual vacation. Property taxes never went over $1500/year. Income tax maxed out at 4.63 percent.
Properties in comparable Silicon Valley locations with less square footage and no basement are now $800K+ with $8000+ in property taxes (I'd be happy with a 2-bedroom cottage or townhouse with a garage. 3 bedroom ranch homes are still listing for $1.2-$1.4M. The same city names have some low-priced properties, but they go with neighborhoods that have murder rates eclipsing Oakland's and none of the location amenities apart from great tacquerias). Income tax is 9.55% plus a 1.1% state disability surcharge on the first $90K of income.
Even having cashed out near the peak of the market, I could be spending at least $50K a year more on mortgage + taxes to have a comparable life style to someplace purportedly expensive. Mortgage rates are higher now, and it'd probably be a jumbo so that's understating it by a lot. One of my friends from high school bought a house outside St. Louis for half what I spent on my town home so that may not be the right comparison.
As a frame of reference, $150K/year is the cut-off for San Mateo County "moderate income" housing.
This disregards minor incidentals which stem from the high sales taxes and everyone else having to cover the same expenses, like mechanics who charge $25/hour more and beers for twice the price.
That's the immediate situation.
The cost of living and salaries in the first world are over 5X developing countries. The inevitable conclusion is that our salaries and costs of living are going to drop until meeting their rising costs and salaries.
Things aren't worse today only because even with an IQ three sigmas out learning to design and build non-trivial software products takes a ten year apprenticeship with people down the hall who've done comparable scope projects before and learned from their mistakes.
There aren't enough people in developing countries who've done that.
Having travelled and worked with people from all over I don't think those guys are too different from us apart from opportunity. I know people who've learned that you can't mentor people over IM and telephone connections and have headed over seas to get employees at low wages that they can effectively grow. It's an emerging trend. Some companies are paying senior people American wages to live over-seas and build local organizations. Eventually we're going to get enough of that experience over seas to have a collision between their (low) cost of living and required salaries and ours.
I'm working towards owning a home in a low cost, low-tax country before that happens.