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How Silicon Valley CEOs Conspired To Suppress Engineers' Wages 462

Posted by Soulskill
from the ungentlemen's-agreement dept.
Oneflower writes "As we discussed last week, a lawsuit is moving forward that alleges widespread conspiracy among the CEOs of Apple, Google, Intel, Adobe, Intuit, and Pixar to suppress the wages of their tech staff. Mark Ames at Pando explains how it happened, and showcases some of the emails involving Steve Jobs and other CEOs. Quoting: 'Shortly after sealing the pact with Google, Jobs strong-armed Adobe into joining after he complained to CEO Bruce Chizen that Adobe was recruiting Apple’s employees. Chizen sheepishly responded that he thought only a small class of employees were off-limits: "I thought we agreed not to recruit any senior level employees. I would propose we keep it that way. Open to discuss. It would be good to agree." Jobs responded by threatening war: "OK, I’ll tell our recruiters they are free to approach any Adobe employee who is not a Sr. Director or VP. Am I understanding your position correctly?" Adobe’s Chizen immediately backed down.'"
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How Silicon Valley CEOs Conspired To Suppress Engineers' Wages

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  • by Anonymous Coward on Friday January 24, 2014 @02:10PM (#46058497)

    There's a knock-on effect... for those of us not employed at the named offenders, the salaries are suppressed. I hope they're convicted.

    • by i kan reed (749298) on Friday January 24, 2014 @02:25PM (#46058709) Homepage Journal

      Absolutely, accountants uses average salary data for determining the maximum a position should pay is, meaning a group of major companies colluding hurts every single person in this field.

    • Well, sort-of... until the labor market gets tight enough. If you're DevOps or a sysadmin with chops, the market is plenty tight enough in many regions nowadays.

      (I know because I'm trying to hire a few right now... top-notch talent is damned hard to find once you weed out the inexperienced and the bullshitters.)

      • by Xacid (560407)

        Which region?

  • by Anonymous Coward on Friday January 24, 2014 @02:12PM (#46058519)

    You'd think, from a free-market standpoint, that collective bargaining would somewhat equalize the sale and purchase of labor.

    But nah, us engineers are too smart for that. We're all superstars and we're always looking to stab eachother in the back for a percentage.

    • by Shados (741919) on Friday January 24, 2014 @02:16PM (#46058567)

      Even with this kind of crap happening, salaries for good engineers keep spiking, with employers fighting each other, one upping each other, piling more bonuses, more vacations, more perks, year after year after year.

      Once that trend stops and things start going down, maybe. But until then? Why would you want to standardize/equalize something when you benefit from the chaos? The companies with standard compensation packages based on specific rules almost all pay less than the others.

      • by fermion (181285)
        Salaries are not good for engineers. The kind of money that was available even 25 years ago is not available today. Sure,a bunch of kids get hired out of college, and a few keep their jobs for more than a few years, or can move to other sectors, but the money that spurs real competition is not there. The free market that creates many opportunities is not there.

        This is really why unions work. Although the free market is not a zero sum game, it is adversarial between competitors. Businesses form unions

      • by JoeMerchant (803320) on Friday January 24, 2014 @06:12PM (#46061873) Homepage

        They "lost it" during dot-com and starting engineer salaries spiked up roughly 100% in about a year. It's not just engineers, any profession suddenly put into short supply becomes incredibly valuable. The AMA knows this, which is why it's so arbitrarily hard to get into med school. It's why garbage strikes (airline pilots' strikes, etc.) work.

        It's 23 years since I got my MSCE degree, at this point I state my salary needs and work for the first person who needs my skills and can handle the salary. We generally agree that I provide good value for the company. When times get tight, I often survive the layoffs, though there were two companies (run by recent graduates) who let me go because they could keep 3.5 fresh-hungry kids on staff for my salary - an understandable choice, though I try not to work for recent graduates anymore.

        Provide value to your employer, it actually isn't that hard to demonstrate that an engineer creates millions in value over the course of a few years' project development. Engineers don't usually need to spell it out for their employers, if you're productive they'll understand it implicitly. However, (and I'm including a 60 year old CEO in this next statement) immature leaders who rush out and spend huge sums on "market development" without ever gaining any sales traction will often view the engineers who gave them the product they asked for as liability and un-needed expense. If you see that scenario developing, the smart thing to do is look for a better organization to work for - as an Engineer, I have not often felt capable to (or, more accurately: empowered to) fix sales and marketing failures.

    • by jythie (914043)
      Sadly there is a bit of an attitude that collective bargaining is something only poor/weak people do, and the better class of people negotiate as individuals, even if it means they loose a lot. Which I guess makes sense, the middle class is already doing pretty well, so they can afford it... individual negotiation is a philosophical luxury since they are generally negotiating amount of luxury in their life.
  • by Anonymous Coward on Friday January 24, 2014 @02:19PM (#46058613)

    If only the tech workers of the world had a touch more self and class-consciousness, they'd be able to see that, often, management is actively working against their interests. From wage-manipulation & collusion, to selling sitting cheek-to-jowl with coworkers as "open" and "collaborative," there's enough to give even a naïve, "everything is awesome!!!," workaday programmer pause.

    • by fuzzyfuzzyfungus (1223518) on Friday January 24, 2014 @02:24PM (#46058695) Journal
      Silly worker. Everyone knows that there is no 'class warfare'. Also, you're losing.
    • by TsuruchiBrian (2731979) on Friday January 24, 2014 @02:32PM (#46058815)

      The only one with your interests is you (and possibly your friends and family). The sooner people realize that the better. You have a professional voluntary relationship with your employer, where they are trying to get the most work out of you for the least money, and you are trying to get the most money out of them for the least work.

      It's like buying a house. Is the seller your enemy? No but he's definitely not your friend either. It's a voluntary relationship where each side can expect the other to exploit any weakness for their own interest. That doesn't mean this relationship can't be beneficial to both parties under the right circumstances. A lot of companies take the strategy of getting people to produce by instilling company loyalty by treating their employees really well. Some don't.

      Ironically Google is actually one of the companies that treats it's employees the best. Maybe they need to have strategies to keep employees salaries in check. I know I might be tempted to feel entitled to a ridiculous salary if I worked at google.

      • by rmstar (114746) on Friday January 24, 2014 @02:46PM (#46059003)

        It's a voluntary relationship where each side can expect the other to exploit any weakness for their own interest.

        For the engineers, it is a weakness that they are peasants before they are engineers. The CEOs have an unfair advantage over them, and that advantage is not part of engineers voluntary agreement.

        Why do I have to even explain this to you?

    • by jythie (914043)
      yeah, but the goal is to become one of the people working against other's interests. If one tries to make the system better it reduces their god given payout that such intelligent people are entitled to, and if they don't get it that means some sinister force like the government is keeping it from them.
    • by khallow (566160)

      If only the tech workers of the world had a touch more self and class-consciousness, they'd be able to see that, often, management is actively working against their interests.

      Why do you think the problem is that people can't "see"? Especially, when these actions are both blatantly obvious and widely talked about?

      At some point, you have to decide what is more important, prosecuting imaginary class warfare or the things you want to do, like say raising a family or having a life. My take is that most people don't care what management does as long as the checks clear the bank.

  • Steven Jobs (Score:5, Insightful)

    by quax (19371) on Friday January 24, 2014 @02:22PM (#46058669)

    He always had the reputation of being a visionary and major league a**hole. I guess he's dead long enough now that we can acknowledge the latter again?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Again? I don't recall a time where it wash;t acknowledged that he was an asshole. I think everyone agrees, he was an asshole. He had some good traits for which he's admired but I think everyone, Apple hater and Apple fanboy alike, has always admitted Jobs was a dick.

      And, to be clear, let's not forget that this story isn't about Jobs - it's about a significant number of CEOs. Let's keep the focus on the big picture rather than attempting to spin it as one man being a dick.

      • by quax (19371)

        True there is a bigger picture here.

      • Re:Steven Jobs (Score:5, Insightful)

        by TWiTfan (2887093) on Friday January 24, 2014 @03:37PM (#46059843)

        I think everyone, Apple hater and Apple fanboy alike, has always admitted Jobs was a dick.

        You haven't been around too many true Apple fanboys. Here are some of the standard cult responses:

        1) He never gave to charity, despite his riches: "He probably gave anonymously"
        2) He parked in handicapped spaces, like a dick: "It was probably for security reasons."
        3) He screwed over his friends, co-workers, and employees on a regular basis, even Woz: "He had already given them so much just by creating the company."
        4) He openly berated and insulted everyone around him: "It was just to drive them to be better and realize their potential."
        5) He tried to deny the paternity of his own daughter, rather than pay child support, even after he became rich: "Well, he did acknowledge her eventually."

  • by schwit1 (797399) on Friday January 24, 2014 @02:25PM (#46058705)

    How is this not self-defeating?

    I would expect higher salary offers coming from outside the colluding companies. This would push many applicants to smaller shops and spread the wealth.

    • by Anonymous Coward on Friday January 24, 2014 @02:32PM (#46058801)

      Yes..... Because all smaller shops are given money trees they can harvest infinite yields from when they form their articles of organization for their company/corporation.

    • by Shados (741919)

      Kind of. The problem is those are companies everyone wants to work at. Maybe not you, definitely not me, but they're dream companies for a lot of people. So someone who wants to work, for, let say, Google, really will only consider an alternative offer coming from Amazon/Apple/Twitter/Intel/Whatever. All those big names. If its not a well known company for engineering, its not on their radar. So a handful of that subset fixing salaries would affect that whole segment, as they only need to outbid each other.

    • by skids (119237) on Friday January 24, 2014 @02:59PM (#46059175) Homepage

      It is self-defeating but not for the reasons you mention, as noted by other replies.

      The reason it is self-defeating is that suppressing the salaries in fields where you badly need talent downregulates the cultivation of additional talent, and if the particular class of worker in question has any sideways mobility, may cause talent to leave those fields for either higher pay or easier work. A deficit in skills, whether highly compensated or not, negatively affects your end product, and even if you are colluding with competitors, negatively affects the market volume since there is less demand for crappy product. (For example, there is less demand now for Google hosted services than there would have been if they had not made a habit/reputation of pulling the rug out from underneath released products.)

  • but the rest of them shouldn't. Pricks.
  • As usual His Steveness conspires to threaten other companies to go along with this scheme. Similar to his book deal conspiracy. Steve was the king of arsewipes.
    • Sorry, I have a hard time feeling any particular outrage for Jobs over everyone else here.

      He didn't say, "If you don't agree, I'm going to sink you," he said, "if you don't agree, I'm going to send recruiters over to poach workers, the way that the honest system works."

      So he's a crook here, but he was threatening Adobe in a way that only mattered if Adobe's CEO was ALSO a crook. This doesn't work if there's an honest person in the ring--it's crooks all the way down.

  • by Anonymous Coward on Friday January 24, 2014 @02:33PM (#46058829)

    As a Technical Director (read: Guy in charge of a group of programmers), I know our company had similar agreements with other programming studios and technical firms in the geographical area we were located in. I learned of it by a slip of the tongue by our HR Director during a meeting.

    I responded along the lines of "Well, if we would pay our programmers what they're worth after 3 years, instead of insisting on keeping them at Junior programmer rates, then we don't have a problem, and shouldn't need special back room deals to keep our talent". I unfortunately did not have the final say in pay increases, and did lose some of my staff to better payment offers. It was all I could do to compensate with treating the team with the highest levels of respect to keep them around due to shitty pay.

    This was happening in Canada for context.

  • My father once told me: If ten employers can sit around a table and decide how much to pay you, the employee should be able to have ten people sit around a table and decide how much you will be paid to work. This would be a union. (Or if you wish not to be be labeled union ... many in the tech sector think .... "I'm not a blue collar thug... I am a Professional" .. call yourself a special interest group)

    The people sitting on one side of the negotiating table have specific interests to defend. The people on

  • Money and power corrupt.

  • by mark_reh (2015546) on Friday January 24, 2014 @03:00PM (#46059193) Journal

    and this stuff was going on back then. They actually told employees they were doing it at the meetings where they announced annual pay raises. My coworkers cheered while I was dumbfounded that people missed the big picture. In essence they were saying "we've fixed engineer salaries with other big employers in the area so don't bother looking to get a better deal elsewhere".

    When I left HP I went to work for Fujitsu- they didn't participate in the salary fixing- and instantly got 40% pay increase and kept my vacation time.

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