What are you talking about? It's not middle management's decision about where to base their company and operations; that comes straight from senior management.
It's generally middle management's decision whether to hire people who will work remotely, whether to hire full-time employees or consultants, and so on.
How so? If you're an on-site consultant, you have to pay the living costs in that area, unless you're living in your car or something. If you're talking about being a remote consultant, then sure that works out great but how many people are able to get a gig like that?
I found no shortage of companies willing to have me work remotely, even back when I was starting out and had little reputation. I almost never worked for someone closer than 3 time zones and often for people 6+ time zones away (in both directions). I was cheaper than anyone living in SV, about the same price as people in the mid-west, and a lot more expensive than people in Russia, India, and China (I had a few contracts doing design work that would then be implemented by cheaper teams because of this).