It's a market-clearing price. If Google is willing to pay more for remote workers in Pocatello, Idaho, then they'll be able to poach them. If not, wages will fall.

Tech companies have always paid less to staff in cheaper cities like Pittsburgh, but the ratio usually still favors the employee (i.e. they make 90% of the Bay Area base salary and their cost of living is 20% as high). Workers can also hack the system by getting irrevocable, long-term RSU grants and then getting transferred to cheaper markets.