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> However, the flip-side of the same coin is what about when someone moves to a more expensive location? Should we then say "this is the fixed salary and you choose where to live, and if you move somewhere more expensive that is your choice"?

I'd say that's absolutely fair, it's kind of the default expectation in my mind at least - I provide a certain value to the company as a remote worker, for which they pay me accordingly. (edit - as someone who just found a job via a HN jobs thread, I don't want to hijack this with a long response. Please see http://pastebin.com/4SrQJRj6 for my full response to this)

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