How Silicon Valley CEOs Conspired To Suppress Engineers' Wages 462
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.'"
Affects all engineers... (Score:5, Insightful)
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.
Re:Affects all engineers... (Score:5, Insightful)
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.
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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.)
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Which region?
Re:Affects all engineers... (Score:4, Interesting)
Understood completely... and yes, oftentimes there are some real bullshit questions at an interview. On the other hand, to be fair, some of them are designed to gauge how well you fit into the company culture. As a candidate, I usually use those questions (and their reactions to my answers) as a cue to see how well I would fit in as well. That part is kinda vital to the success of both the employee and the company (I've worked at places which has some rather toxic cultures... sucks to say the least.)
As for the search? I guess the hardest part is finding a person who is a technical wizard who can fluently speak Stakeholder. Our company's org chart is rather flat for our size (trust me, I like that - only two human beings sit betwixt me and the CEO), so you not only have to know how to deliver the solution, but you don't get a filter between you and the people who want that solution. And yeah, we're willing to pay well above average around here for such people. Why? Because the act of hiring is a soul-grinding time-suck, and having to do it repeatedly would suck even more; I'd rather be tinkering with stuff.
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If you want to pretend to be an engineer then you have to put up with "hardships" like that, just like the real ones.
Re:re. Affects all engineers... (Score:5, Funny)
He won't.
Someone is gonna jailbreak him after a day or two.
Re:re. Affects all engineers... (Score:4, Funny)
can't wait to see Jobs spend the rest of his natural life in prison over this one.
Ha, well if there's a god, he's certainly in hell. He's probably in the epic prick VIP area, right next to Hitler. And there are no handicapped spots for him to park his Porsche in there.
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Is there a coherent thought in your post?
I'll guess, based on the failure to chose correctly between "right" and "write", that you're incompetent, poorly paid or unemployed, and insanely jealous of everyone better than you.
Time for unionization in the tech sector yet? (Score:5, Insightful)
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.
Re:Time for unionization in the tech sector yet? (Score:4, Informative)
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.
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This is really why unions work. Although the free market is not a zero sum game, it is adversarial between competitors. Businesses form unions
Re:Time for unionization in the tech sector yet? (Score:4, Insightful)
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.
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I want to believe this, because it reinforces my own biases, but it's sounds incredible, so I can't justify accepting it as true.
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Salaries go up but compared to other equivelent professional positions the share of company revenue/profit is significantly low. If you take reasonable comparisons with key professionals in other industries then you would expect software engineers to be making betweem 25%-40% than they are currently making.
Aside for Wall Street parasite, name one profession that has a better effort to salary ratio if they're good at it and have a few years of experience. Just one. I can't think of any.
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Effort to Salary ratio, rough estimates
me:
$100k/50 hrs/week, no enemies, and a private life
congressman:
$174K/70 hrs/week, 200 million enemies, and a public life
" I am moding."
Well, that explains a lot about Slashdot.
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I'm pretty sure employers tend to oppose unions.
Certainly many employers do oppose unions, especially real ones. But unions are fairly easy to co-opt and can then be used as a means of control and limitation. Just like their government counterparts, bribery of union officials elected by their membership is a time honored tradition. I've personally spoken to a former union rep about how they got extra jobs and extra pay from their employer because of their union position. Anecdotally this seems to have been a common practice that undermines the whole
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see also, increasing the # of H1Bs awarded (Score:5, Informative)
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.
Re:see also, increasing the # of H1Bs awarded (Score:4, Insightful)
Re:see also, increasing the # of H1Bs awarded (Score:5, Insightful)
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.
Re:see also, increasing the # of H1Bs awarded (Score:5, Informative)
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?
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This isn't really true. Any reasonably coherent group has common interests and engineers or workers in general certainly are such groups.
I didn't say that your interests can't overlap. In fact I think I implied that quite often they do. What I am saying is that overlapping self interest should not be confused with concepts like altruism or kin selection. The second your interests no longer overlap significantly both sides should expect the relationship to terminate.
The degree to which ones relationship with ones employer is voluntary is also fairly doubtful. It is voluntary only in that there is a possibility to choose among employers, but even if they were in perfect competition this does not make making the choice voluntary. That is only voluntary as long as one has the resources to become ones own employer.
I would agree with you that it is essential to maintain the ability to become your own employer, in order for employment to be considered voluntary. But I really don;t see muc
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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)
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?
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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.
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True there is a bigger picture here.
Re:Steven Jobs (Score:5, Insightful)
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."
How does this keep salaries down? (Score:3)
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.
Re:How does this keep salaries down? (Score:5, Funny)
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.
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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.
Re:How does this keep salaries down? (Score:5, Insightful)
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.)
Jobs slipped the noose (Score:2)
Organized by Steve Jobs himself (Score:2)
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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.
Not Unique to Silicon Valley (Score:5, Interesting)
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.
What else is new? (Score:2)
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
The truth (Score:2)
Money and power corrupt.
I worked for HP in silicon valley 20 years ago (Score:5, Interesting)
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.
Re:I worked for HP in silicon valley 20 years ago (Score:4, Insightful)
You're dead wrong. If the majority of large engineering employers in an area, say silicon valley, are fixing salaries, the engineers can't all up and leave for the few companies in the valley that don't participate in the collusion, so the large, colluding companies are not being harmed. The only harm is to the engineers whose salaries are held artificially low.
Now the same a-holes are laying off engineers, claiming there are shortages, and lobbying congress for more H1B slaves.
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Except the fact that so many of the companies big enough to afford the better salaries and need lots of such engineers were in on it...
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More generally, if this agreement were not of value to the collaborators(and to the detriment of employees) why would they have bothered to take the time and legal exposure to hammer it out?
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It occurs to me that GP might have been focusing on application "versus" recruitment. Recruitment happens whether the applicant applies unsolicited or applies due to invite. Employers do not assume a self-initiated application is a done deal. The applicant could have many applications fielded. To *your* point, recruitment happens when determining benefits and wages in either case.
Re:So, cue up.. (Score:5, Insightful)
Collusion, by definition, is not a free market.
When you think of a model of the "free market", think of hundreds or thousands of small merchants gathered in a town square hawking their goods, with many of them selling similar items.
CAPTCHA: "parent is an idiot"
Re:So, cue up.. (Score:5, Insightful)
Collusion, by definition, is not a free market.
...And since collusion is natural behavior in situations like this for company managers, it follows that in order for a market to be free, the behavior of its participants must be regulated.
Which, seriously speaking, is a rather interesting point.
Re:So, cue up.. (Score:5, Insightful)
Which, seriously speaking, is a rather interesting point.
And one which many ideologues try very hard not to understand. "Free market" is more of a slogan than a clearly defined idea. I prefer the term "competitive market" to emphasize what's really important.
Re:So, cue up.. (Score:5, Insightful)
You know, I think I'm going to start using 'competitive market' instead of 'free market'? In areas where competition is impractical, such as water/electricity to the house, I prefer that the provider be a cooperative. Otherwise most of the regulation methodologies I support are designed to increase competition.
Re:Why do people think that? (Score:4, Insightful)
Looking at the cost for the final connection from the power line/main water line is like looking at the cost of a door to try to say how much a store costs. The final connection to your house for power might be $500, but that's only for ideal connections. I've heard amounts in excess of $5k, and generally utility companies heavily subsidize final connections.
Consider if you have two competing water companies. In order to be truly 'competitive' they have to be separate. That means that they can't share the same pipes. That means that rather than running a 12" pipe to a neighborhood, each needs to run at least an 8" pipe. 12" pipe has more than double the capacity of 8", by the way, but it doesn't cost twice as much, as it only uses 50% more material. But half the customers are on each competitor...
Alternatively the companies would 'lease' capacity in their lines to each other, but if that happens they end up so tightly in bed with each other that they're effectively one company with two names anyways.
A secondary option that happens sometimes for electricity is that you have a service company that manages the lines, the company you purchase your power from is the one that arranges for 'your' electricity to get on the lines, whether that's by operating their own generators or just buying the power on the open market. But even then, there's such a natural advantage for the one that runs the lines in your area to manage that that it's a 'natural monopoly'.
This has been proposed for telecoms - your ISP arranges to lease the connection from your house and the appropriate backhaul to their facility where your packets then go to the internet at large. However unless the telecom company that owns the connection is forbidden from being an ISP(government regulation!), they have a generally insurmountable advantage along the lines of charging as much or more simply to lease the line than it is to simply go to them for internet service. Tends to kill competition.
Re:So, cue up.. (Score:5, Insightful)
A free market is a necessary, but not sufficient, component of a competitive market. And what we really want is an efficient market.
A “Free Market” is when 2 people freely exchange goods. The problem is that there is a asymmetry between the people. One buyer has superior knowledge, for example when selling a used car or house. The seller knows if the car is a lemon or not. Or because there is a difference in power. Thousands of employees on one side, a few companies on the other. By collusion the companies are increasing their power relative to the employees.
You can’t eliminate this asymmetry – it is the nature of the beast – but you can minimize it.
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Regardless of other opportunities, I'm unlikely to be able to just walk across the street and immediately get another job, and the company is unlikely to be able to immediately hire a replacement for me.
We're both faced with an indeterminate period of reduced productivity if we end our association. But mine is a 100% reduction, while the company only faces 0.1%. As such the company is in a far stronger negotiating position.
I agree that unions are worth considering anytime there's a strong imbalance in pow
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Re:So, cue up.. (Score:4, Insightful)
Re:So, cue up.. (Score:5, Insightful)
In this example, say that the employees of the colluding companies are making $100k/year whereas they are really worth $120k/year. Non-colluding companies can now easily poach these employees by offering them, say, $110k/year.
So let me get this straight:
- Without the collusion between employers, the employees would make $120K/year.
- With the collusion between employers, the employees would move to a different company and make $110K/year.
- Conclusion: The collusion between employers is costing the employees at least $10K/year.
That's not a self-correcting system, that's damages. The companies who colluded can easily attract talented people making less than $100K/year by recruiting in different areas of the country (where techies frequently make less than $100K/year), or different areas of the world (where techies make far less than $100K/year) via H1B, so they'd suffer some turnover but no major disruptions.
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Of course they would have: If they collude, they pay their people $100K/year. If they don't collude, everyone poaches from each other and they all end up paying their people $120K/year.
Re:So, cue up.. (Score:4, Insightful)
One place where techies earn a lot less than $100k / year is the UK. Not a country you'd associate with little money...
Well, there are numerous problems with this comparison. You want to measure real wage, not the money wage. The real wage/money wage ratio for Britain is probably obviously higher than that for the US worker. Consider, a British pound trades for 1.65 US Dollars [x-rates.com] right now. After that, you factor in taxes (everyone loves to do that, right?) .
And, then you factor in things like standard of living. Everyone loves to point out the increased gas costs and rent, but not underline the fact that more people don't own a car, or even feel like they need to, because of public transportation. Like, I live in NYC because I hate driving, so it's a "feature" to me. YMMV. Google employees, for instance, save money because of amenities like the Google busses we're hearing so much about. Then you have to factor in the social services that are provided for each country. It is a lot cheaper to be pregnant in Britain. Yes, because the taxes are higher, but if you factor in taxes, you have to factor in what you're getting for them.
I haven't done the work, but I'd be interested in the results.
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Except that as things shift theirs always incentives for new collusive alliances to form, so employees will always be losing out.
And exactly what negative impacts would you suggest might follow from aggressively banning collusion between employers? Hell, mandate that companies found guilty must pay out 200% of the total estimated lost wages over the entire period of collusion and many companies will be scrupulously avoid even the semblance of collusion. Especially if corporate liquidation and clawback of e
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I would say the 200% goes to every affected employee working for them during the period in question, proportional to their earnings. (or perhaps 100% to the victims, 100% to the lawyers that got them justice, whatever) If it's estimated that an industry cabal collusive lowered salaries for pizza delivery guys by an average of 20% over the period in question, then each delivery guy that worked for them during that time gets a 40% bonus on his total earnings during the period in question, even if they've sin
Re:So, cue up.. (Score:5, Insightful)
However, by the nature of collusion - where each participant has incentives to screw over the other participants, or non-participants can take advantage of the collusion - it is an unstable, temporary arrangement, and will fall apart sooner rather than later.
One of the alleged provisions of the arrangement was to punish companies that reneged on the deal by targeting its key engineers for recruitment. At that point what you have is regulation by cartel. This, by the way, was what government *was* before the advent of the modern democratic republic state. An aristocracy may spend nearly all of its time fighting itself tooth-and-nail, but it closes ranks against outsiders.
Re:So, cue up.. (Score:5, Insightful)
Not that interesting in practice. No one sane would argue that the CME commodities markets are not free markets. They're a shining example of free markets working well, doing the sorts of things that economic theorists expect (unlike much of the rest of the economy).
These markets have a bunch of regulations - the key is that most of the regulations are market rules, not laws, and the power of the government is mostly focused on fraud prevention, contract enforcement, and preventing counterparty payment risk (a critical subset of the previous items). What's not regulated is price, nor legal preference given to certain sellers - no government-granted monopolies. That's what makes a free market.
There will always be anarchists calling themselves libertarians, but mainstream libertarian though expects the government to provide contract enforcement, fraud prevention, and in general enough criminal law enforcement where it's safe to trade.
Re:So, cue up.. (Score:5, Insightful)
Could you say that again, except coherently this time?
Libertarianism is an attempt to solve the problem of providing safety and basic social order with the minimum possible government that gets the job done. It's an optimization exercise. There's very little agreement on what that looks like, exactly, but widespread agreement that fraud prevention and contact enforcement (and some sort of criminal justice system) are part of it.
Anarchism is the claim that we can have safety and basic social order with no central leadership at all (anarchy means "no leader", not "no laws"). I view this like Marxist communism: cool idea, wrong species.
Re:So, cue up.. (Score:5, Insightful)
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Re:So, cue up.. (Score:5, Interesting)
Collusion, by definition, is a free market.
And it's where markets will always go if the power players in the market are friendly/courteous rivals. It helps those at the top.
And it's exactly why truly free markets aren't good for the average person.
Re:So, cue up.. (Score:5, Funny)
So said Adam Smith, but we all know "Smith" was just a pseudonym for Karl Marx.
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You confuse "unregulated market" with "free market", much like confusing an anarchist with a libertarian. "Truly free markets" obviously don't work, but that's trivial and uninteresting. The interesting point is that it really only requires quite minimal government involvement to avoid the big problems (contract enforcement, fraud prevention, and the like), but once you start giving the government enough power to select winners in a market it's all downhill from there (hey mister cable company, how'd you
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In a communist government ...
OT. Who was talking about communism or anything approaching it?
Re:So, cue up.. (Score:5, Funny)
Re:So, cue up.. (Score:5, Insightful)
What you're saying is something unsavory that businesses might do in a free market, isn't the free market. The free market means precisely that. Companies are free to collude, price fix, bribe, etc. It's only regulation that prevents it from happening. Just because you don't like one consequence of the free market doesn't mean you get to disavow it as part of the cost of doing business.
This is one of the primary fallacies of free market thinking; that businesses will be somehow compelled to do the right thing without the boot of the government on their necks.
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>So, when buyers agree — such as on various "review" sites — that a particular product or service is overpriced, it must be prosecuted?
No, when the dominant producers of the product are found to be colluding to set the price it should be prosecutted, regardless of whther most peopl think the price is reasonable.
If I think $500 is a reasonably price for an HDTV that's fine. But if the market price would be $400 if not for industry collusion, then the industry has stolen $100 from me, even if
Re:So, cue up.. (Score:5, Insightful)
OK. I am actually a free market libertarian software engineer. This does bother me, but I would suggest that the solution to these sorts of problems is exposure rather than laws. I don't feel that my ability to market my skills is significantly affected. I don't need to work for any company that would underpay me. Even though these are big companies, the percentage of software engineers they hire is a small percentage of the total.
As far as examples of negative aspects of the free market go, this is pretty mild.
I would suggest that a free market approach would be to go one step further and have shareholders conspire to limit CEO salaries. Those cut into corporate profits as well.
Re:So, cue up.. (Score:5, Insightful)
OK. I am actually a free market libertarian software engineer. This does bother me, but I would suggest that the solution to these sorts of problems is exposure rather than laws. I don't feel that my ability to market my skills is significantly affected. I don't need to work for any company that would underpay me. Even though these are big companies, the percentage of software engineers they hire is a small percentage of the total.
As far as examples of negative aspects of the free market go, this is pretty mild.
I would suggest that a free market approach would be to go one step further and have shareholders conspire to limit CEO salaries. Those cut into corporate profits as well.
Lots of luck.
A Corporation is NOT a one-person-per-vote democracy. It is one-SHARE-per-vote.
And guess who owns the majority of the shares in most corporations?
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Re:So, cue up.. (Score:5, Informative)
OK. I am actually a free market libertarian software engineer. This does bother me, but I would suggest that the solution to these sorts of problems is exposure rather than laws.
This time they got caught out in a few emails, next time they will just keep it to verbal agreements on the country club golf course. The "exposure" is not going to come from a few or even many Engineers complaining in isolation that there might be some collusion going on as the alternative offers are drying up.
I don't need to work for any company that would underpay me.
and if you did you would not be able to get a decent higher paying job elsewhere due to collusion like this.
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The "exposure" is not going to come from a few or even many Engineers complaining in isolation that there might be some collusion going on as the alternative offers are drying up.
The exposure doesn't need to come from engineers. It can come from anyone who knows about it.
What you are suggesting is that companies can forma a cartel for software jobs. I agree this is possible, but I don't think it's easy to make this cartel industry wide. The larger the cartel, the more unsustainable it becomes.
As it is, there are tons of opportunities out there for talented software engineers. There is more software that needs to get written than there is developers to write it. It takes a lot of
Re:So, cue up.. (Score:5, Insightful)
The "exposure" is not going to come from a few or even many Engineers complaining in isolation that there might be some collusion going on as the alternative offers are drying up.
The exposure doesn't need to come from engineers. It can come from anyone who knows about it.
The only reason we know about it at all is because there was a lawsuit filed accusing them of this illegal action. If it becomes totally legal, nobody's going to be filing that lawsuit in the first place, and the parties involved will continue to do it secretly.
Re: (Score:2)
This time they got caught out in a few emails, next time they will just keep it to verbal agreements on the country club golf course. The "exposure" is not going to come from a few or even many Engineers complaining in isolation that there might be some collusion going on as the alternative offers are drying up.
They obviously believe the hype the new world of tech is somehow different than the old world and are about to discover it often just make sit easier to find out stuff to use against you.
Re:So, cue up.. (Score:5, Insightful)
I see you crossing the line from "libertarian" to "anarchist" if you don't see a legitimate role in the government preventing this sort of collusion. Much like there are rules on all the commodities exchanges, backed by laws, that prevent collusion to corner the market in any given commodity. It's a very minimal low-touch sort of role for the government to prevent this sort of thing.
Had this been 2 small companies no one cares about colluding, I wouldn't see much problem either, but this is a non-trivial portion of all software jobs in the valley, enough to distort the market. This is exactly why you're not allowed to control more than 10% (or whatever it is, but I think that's right) of a specific commodity contract.
Re:So, cue up.. (Score:5, Insightful)
You're funny.
Only laws will prevent this from happening. Perceptions can be swayed by gradually introducing change and exposure and by gradually "normalizing" this obviously criminal activity. Exposure is not effective, it can be managed with enough positive spin. Only laws with strong deterients are effective.
You say about Apple, Google, Intel, etc. "the percentage of software engineers they hire is a small percentage..." I don't think you know what those companies do.
It's not about wages (Score:4, Interesting)
I suspect that this was not overtly about wages. It was about retention. You can't just say, well they could have paid them more to retain them. As the e-mails indicate regardless of any feasible wages it would always be possible to offer higher wages to a subset of employees that could cripple the organization. That's what this was about. People are not simply interchangeable. When you hire someone it's also an investment of your core strength into them. So in the short term yes perhaps a few employees could have been enticed by higher wages but then ensuing self destructive battle would have damaged all the companies fitness, lowering everyones wages. So it's not a give this lowered wages.
This is one problem that collective bargaining does address. It tries to maximize employee wages over the long run and side effect is that trade unions also normlaize wages across all the companies. But the union is always balancing a companies ability to pay with killing the golden goose.
Re: (Score:3)
It is completely about wages! Did you miss the part about keeping employee pay within narrow bands? The sharing of compensation data with competitors? They prevented their engineers getting hired at other major employers, then kept these same emploees from making a market wage, ie. the wage they would receive if free to go to another job! If these engineers are so critical, maybe, they should be paid like it? And in doing so, raise the pay for all engineers? These CEOs, who made the deals here, are worth Bi
Re:It's not about wages (Score:5, Insightful)
You either have no idea how the engineering job market works or are being deliberately obtuse.
These companies set the price for engineering hires throughout the valley. If they collude to keep salaries down, all other companies vying for engineering talent will not have to pay the market rate. In effect, they are guaranteeing themselves access to engineers at depressed wages by market manipulation.
And in the real world, you retain talent by paying for it. It doesn't work for free. If the talent is so freaking important, then pay for it. It will stay if you are paying as much or more than is available on the outside. If you are a business, and you have critical folks, you should be paying them like they are critical, not limiting their job options.
You would care about this if you were the talent in question, getting underpaid and reported for applying to another job. Imagine how many careers have been derailed in the valley by these HR departments reporting job seekers to their employers.
You would also care about this if you were a shareholder or current employee at one of the cartel companies, given that all who have applied for a job from one of these cartel companies to the other and been rejected now are a pain free class action waiting to happen. All who have had their wages depressed are a class action waiting to happen.
And in the end, everyone loses except the CxOs with their golden parachutes and the Blood Sucking Lawyers.
That's why this is fscking stupid and wrong. You can resume speculating about their motives, as though that means a gd damn thing.
andy
Re: (Score:3)
It's not illegal.
The companies are accused of violating the Sherman Act and Clayton Act antitrust laws. Obviously the trial hasn't occurred yet, but they gained approval for a class action suit from both the district court and the court of appeals. The trial of course is what determines whether the companies are guilty, but in order to gain permission for the suit they had to demonstrate that the alleged behavior could violate those laws.
Re:So, cue up.. (Score:4, Informative)
I don't need to work for any company that would underpay me.
And how would you judge whether a company is underpaying you? By comparing what the company offers you to the *market price*.
What the CEOs stand accused of is colluding to depress the market price for engineering labor.
Re:So, cue up.. (Score:4, Funny)
And how would you judge whether a company is underpaying you? By comparing what the company offers you to the *market price*.
That bit gets a little tricky. In some sense I do compare my salary to the market price. But lets say the market price for a software job was $20k/year. At that point I would consider being a freelance software engineer or starting my own company and hiring a bunch of talented engineers for $20k/year. If the market price were $20k/year, fewer people would go to school to become engineers, and this would lower the supply and increase demand for engineers.
Everyone making this calculation in their head has an effect on market price.
No single entity controls the market price on anything. Engineers have an effect. CEOs have an effect. Universities have an effect, etc.
What the CEOs stand accused of is colluding to depress the market price for engineering labor.
And I agree that that's what they did, and I agree that they probably succeeded to some extent
What I am saying is that I don't think they had a large effect. I think they had the effect that you might expect a small cartel to have. Maybe someone will publish a study showing all engineers industry wide make 20% less because of this deal, but I doubt it, and I made this doubt public.
Re: (Score:3)
Doesn't matter which party, for stunts like this. It really breaks both sides philosophy on the economy.
The Conservatives/Free market folks, don't like this, because it is manipulating the Market to get cheaper workers, and falsify the Demand for the workers.
The Liberals/Controlled Market folks, don't like this as this manipulating of the market is happening in back doors without the correct oversight.
Re:So, cue up.. (Score:4, Insightful)
Nice troll, but I'll have fun with it...
1) conspire all you want, but Silly Valley isn't the end-all/be-all - there are lots of other just-as-exciting places to work.
2) You can gain more from their reputation than they can save by keeping your wages lower. For example, I could go there, do my time for a couple of years at $HOUSEHOLD_NAME, maybe do that at two or more of them, then go back to my home region with one hell of an intimidating resume, plus experience and ideas that can be put to damned good use. This allows me to command a far more comfortable salary/cost-of-living arrangement when I get back home. (Note: raw dollar counts are a stupid metric - always count cost-of-living, but I digress...)
3) Because of the above (and more), It's Silly Valley that loses out more than I do. I'll explain: I have personally turned down point-blank job offers from a few of the aforementioned names in TFA, because I already have similar big names on my resume, and they're not willing to compensate enough for the area's insane cost-of-living. What I mean is, after cost-of-living adjustments, they'd have to pay me $180k/yr or more to match the same level of financial comfort that I enjoy where I am now. Meet or beat that comfort level, and I'll move. Otherwise, unless I have no real alternative? I'll turn it down with a smile.
4) Because of the above (and more), the smarter tech folks are similarly clued-in, and are therefore harder to find and get (let alone keep) in that area. This in turn means this: over time, those companies lose out on the best talent, but upstart companies elsewhere gain that talent instead, allowing the little guys to more effectively compete. Meanwhile, Silly Valley winds up with a majority of people who boil down to two types:kids with no experience who leave as soon as they wise-up, or burn-outs chasing their own eventual start-up on the side (which means the latter will be somewhat worthless to the corp who hires them, and are likely stealing the company's ideas along the way while those ideas are still embryonic.)
QED: The market eventually does even things out, if you let it. Just because it doesn't happen on an instant-gratification timescale doesn't mean that it doesn't happen, eh?
Re:So, cue up.. (Score:4, Insightful)
You are missing part of the equation. Buy a house in Slicon Valley and when you come to retire, move to a region with low cost of living, taking with you a much larger cash pile from selling that much more expensive house. Leverage can produce wonderful effects (it can also bankrupt you as many people found out during the recession).
I would also argue that start-ups tend to be in California because employment agreements that prevent you from moving to a competitor are not enforcable in CA.
Re:So, cue up.. (Score:4, Informative)
I would also argue that start-ups tend to be in California because employment agreements that prevent you from moving to a competitor are not enforcable in CA.
This is often cited as a major reason why Silicon Valley (and probably the Bay Area and San Diego biotech clusters) even exists in the first place.
Re:So, cue up.. (Score:5, Insightful)
The fuck does the political alignment of the douchebags involved have to do with the economic policies that allow the abuse.
If you have a party that says "repeal all murder laws" and a party that says "murder laws are okay, we should maybe have them"(the political economic balance in the US). You shouldn't be going "Ha! At least one murderer was for the anti-murder party." as if it settles the issue. It's retarded.
Re:Anti-Capitalistic (Score:4, Interesting)
Company prohibitions against employees sharing salary information are also anti-capitalistic because they create information asymmetry.
Re: (Score:3)
A company withholding information from a competitor is a natural information asymmetry we understand as normal and even necessary to capitalism.
Preventing workers from discussing salaries is is not. These are two actors in the market who want to exchange personal information (not information belonging to the company) in order to improve their position in the market, and a third party (the company) prevents them from doing so in order to improve its position against them.
Re: (Score:2)
What can they not afford? Losing the staff or paying them to stay? If the answer is both then they must be making a loss.
Re: (Score:3)
It's coming Silicone Valley.
Silicon, no "e". Silicone is the stuff in breast implants.. ..I’ll leave it to the reader to reinterpret the above quote in that context.
Re: (Score:2)
I was an Apple shareholder at that time. If Apple inflated profits through illegal activity - activity they knew or should have known was illegal and would result in future fines and restatement of earnings - then they didn't just defraud the workers, they defrauded their shareholders, too. We could see shareholder lawsuits follow if this class action suit goes through, and shareholder lawsuits - especially those brought by large institutional investors who have their own legal teams and would get the bul
Re:A Three word solution to this: (Score:5, Insightful)
Well? Many engineers see themselves above and superior to manual laborers which unions typically represent. Also their superiority has convinced them that they will become C*Os and the like making LOTS of money. Little did they know there have been so many big companies and their leaders consolidating and conspiring to make their output less expensive.
There's a LOT wrong with the current tech market and NONE of it has to do with true free market capitalism and everything to do with seeking to get around it or controlling it.
When you casually look at the whole free market idea, you should quickly realize that the free market is very much pro-little-guy. When the little guy becomes the big guy, things become a LOT more expensive and perilous. Too many up and comping little guys for anyone to remain king of the hill for any amount of time...that is unless they start cheating.
In free market capitalism, it takes a lot of work and good ideas to get to the top. It takes a continuous flow of work and good ideas to stay there. But that's not what the kings of the hills want. Like Microsoft, they want to dominate a market and then get by making crap and spending their money on schemes to keep other people from competing with them. Not free market capitalism.
Re: (Score:3)
Do you also believe in frictionless surfaces? Hint: crude approximations often don't reflect the real world very well.