At face value, I can see why you think that. Supply and demand, as supply dwindles and demand increases, the price increases as well, right? Simple economics. I understand it and I get it, but I don't think the instance of developers that it is fair that bigger companies with larger profits and reach should be able to take all of the talent in the area by offering above average salaries to get them to sign. Smaller companies with half the profits and budgets shouldn't have to compete or die, it just is not fair.
While I agree that companies should not see it as an excuse to hire cheap talent elsewhere, when there is nobody to pick from in the pool (nobody decent) then where do you go? When the likes of Google are actually offering students jobs before they've even graduated and entered the job market, how does little ACME Corp or Joe Startup compete when workers are being plucked before they even enter the workforce?
Forget the money for a moment, when there is nobody to pick from or you are constantly entering into a bidding war with Application A who has received an offer from Google for $250k per year and all you can offer is $125k and perhaps some other perks, is that fair? Google aren't paying $250k because they think the applicant is worth it or that is the going market rate, they are paying this much because they know the application nine times out of ten will say yes to a ridiculous sum of money, because they need a developer and the cost is irrelevant to them and because they can.
Proper average market salary and inflated market salary are two different things, wouldn't you agree? And people ask if we are in a tech bubble? When graduate developers fresh out of college are being offered the kind of salaries close to what the prime minister of Australia earns (about $500k AUD for reference) you have to ask yourself, is it fair for smaller companies to compete or die because some big companies have set the bar way above average market rate?
But like I said, I know there are companies that take advantage of overseas workers. I have heard stories of people being forced to work ridiculous hours because they are on a H1-B and know that if they fire the employee, everything they have just packed up and moved thousands of miles will have to be packed up and transported again back home. But not all companies are like that, just like not everyone is a racist. It's always a handful of people that ruin it for everyone else.