Offshoring is what is happening and will accelerate. Search the article for 'Toronto'.
I have sympathy for cash poor startup founders, but offering substantial equity works wonders. Like a real amount, not something that rounds to 0. It's hard to feel bad for someone who wants to keep all the upside and not pay a good salary. Someone making 500k elsewhere should be a key hire, so spend or dilute yourself accordingly.
It's a short term vs long term balance. As an American you should want US to remain dominant in the startup ecosystem. Restricting startup access to skilled workers is counter-productive in the long run, even if it serves your short-term interests.
One would assume that the business still pays taxes, bills, rent etc.
It's still a net gain to the economy, especially when the alternative is for the work to go overseas.
Unironically yes. Thats is what they should do. If you pay below market wages, well sucks to be you, I don't care if you complain.
But to give an actual good face alternative, they could hire lower skilled employees from non-traditional backgrounds, and train them up.