Sure, and I'm talking about how much a company is willing to pay. A company acting economically is not going to pay more for a developer than the value they will provide, or else hiring them will lose them money.

Note that as I said, value can be much less straightforward to calculate. An employee may provide no direct value but have a positive effect on the other employees, increasing their value generation. Or an employee may provide excellent value but drive down everyone else's productivity (e.g. by making them unhappy or constantly demanding attention) thus reducing overall value. Or an employee may initially provide low value but have massive potential.

Additionally the problem with hiring is that the candidate has yet to generate any value at all for the company and even if they do have massive potential there is no guarantee that the company can tap into that potential fully. So we're not even talking value (as when considering a pay rise) but expected value.

The cost of labor is caused by paying employees wages/expenses/benefits and having administrative and legal overhead for doing that. The wages and benefits are to a degree subject to demand and, to an even lesser degree, supply.

What a candidate is willing to accept on the other hand depends on what they think they could get elsewhere, how much they want to work for the company in question in particular, what their personal expenses are and how badly they need money.

Companies generate profit by extracting surplus value by simply paying employees less than the value they generate (companies don't produce value, labor does, profit is surplus value left in the company by paying labor less than the value it generates, adjusted for the cost of doing business).

Geographical salaries work by placing the company in one location (usually with a relatively high cost of living) and hiring employees in various other locations (usually with a relatively lower cost of living).

If you can get people from poorer countries producing the same amount of value for your company as people from your richer country, and you can use geographical salaries to justify paying them less, you increase your profit margin on that labor simply by replacing a highly paid local position with a less highly paid remote position.

In the 90s we used to call this "outsourcing" except we did it with entire teams of people rather than individuals (to mixed success because it hinged on the team lead not only understanding you correctly but also propagating the information correctly and also usually reduced overall visibility outside the team). It was widely understood as the blatant cost-cutting measure it was.

Calling it "geographical salaries" and doing it at a finer resolution doesn't change its nature.

And yeah, you won't get a fairer share of your value just by asking for it individually. You'll just get fired and replaced by someone who's happy with what they're offered. This is what you need collective bargaining for -- except that's much harder to organize or even decide on when you're geographically distributed and mostly using company controlled channels for communication.