[sidlls]

Possibly, if it were large enough scale to truly impact the supply of labor at a sufficiently lower price point to matter.

There are a variety of remote work arrangements: 1) local employees who have employers with liberal work-from-home policies (they're "remote" when they don't commute in), 2) employees who are always remote, but still in-state (located in the same state as the employer), 3) employees who are always remote but still domestic (located in the US), 4) employees who are always remote and located internationally.

The first two kinds of remote employee don't incur (much) additional cost to the employer. The third kind can incur non-trivial additional costs in the management of payroll (state income taxes, labor/unemployment fund requirements, etc.), especially if done at any scale. Larger companies can do this because they are already established in multiple states, but smaller ones tend to impose restrictions on where remote workers can live and even whether they're permitted to move to a new state and still remain employed. The last kind is a whole other ball of wax--it has the same tax and payroll management problems of the third kind, but additional complexity I'm sure.

Then there is the additional overhead of managing remote teams. Having experienced being an "individual contributor" and coordinating with project management to manage remote teams I can assure you this is not a trivial thing and involves its own costs.

So all these factors influence how much lower the salaries have to dip before they are worth it. Personally, I doubt remote work will impact salaries in this area much anytime soon.

[jon-wood]

The last two in my experience are handled by treating the remote employees as effectively contractors. They'll incorporate as an independent company, and then bill themselves out for whatever salary they're on, taking on responsibility for their own taxes and other requirements.

[sidlls]

For US workers that may very well run afoul of labor and tax laws (and in fact almost certainly does). For foreign ones it depends on their laws.

[jon-wood]

Is that actually the case? As far as I'm aware in the UK at least its not that you're outright forbidden to work as a contractor under conditions that would otherwise be considered employment, you just have to pay tax on that basis rather than pretending you're really an independent company.