I read the OP being about shortages in certain local markets, not about employers generally not willing to pay enough. A college grad from UCLA looking to make 60k probably isn’t looking at any employers in these cities offering incentives. They have a hard time getting people to look there at all, even if they’re paying rates similar to rates in large markets but adjusted for cost of living differences.
Is it blown out of proportion? I think so, no real surprise there. But, is there a shortage in certain local markets looking to be the next Austin? I think so, and that’s why the cities are offering the incentives in the first place. It is sort of a question of whether the chicken comes before the egg though. So the incentives could simply be the city’s way of getting educated people to move there so that companies will be able to/ want to set up operations there.