I don't think it matters how a company or candidate justifies their offers and demands. It really comes down to their respective bargaining power. So when remote work increases the pool of potential candidates, it's no surprise that employers will try to use this to lower costs.
It's not a symmetric increase. Employers that pay FANG level salaries are concentrated in a few major cities. Lots of very skilled developers scattered across the globe don't care about money that much, so they aren't tempted to move to SV for a dramatic salary bump. However, they may be tempted by a modest salary bump if they're allowed to stay with their social circle.
True, it’s the law of one price. However, privileges / capabilities aren’t evenly distributed. So, while remote does widen the labor market, wealthy countries tend to carry large shares.
It’s not a zero-sum game at all. Employees from wealthy countries can gain labor surplus through technology transfer a number of ways or even find business partners and employers.
Mutually beneficial exchange is the name of the game. It’s true that different folks achieve different relative success compared to their peers. That’s okay and good when it’s the product of honest just exchange.
