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Supposing substantial antitrust actions are taken against Big Tech, would that have any effect on rank-and-file salaries in software? Big Tech kinda sets the ba

Supposing substantial antitrust actions are taken against Big Tech, would that have any effect on rank-and-file salaries in software? Big Tech kinda sets the bar regarding salaries, no? When MSFT was hit with antitrust action did it have any effect like this? Or is it an apples/orange comparison?

djbusby 5y ago
I've been in tech since 1997, spent some time at MS (back in NT4,Win2k). The only wage pullback I've seen was dot-com implosion. It lasted maybe two years of slightly reduced pay.
MeinBlutIstBlau 5y ago
My lead has been working for 30 years as a dev and has told me his salary has been pretty consistent throughout so I don't believe that's the case. The coastal cities project absurd salaries but when I look at indeed across all of the US, 60-120k is pretty standard depending on entry to senior. If they got knocked down a peg, I highly doubt a lot of people working for google or microsoft would be vying for the lame boring "conservative" work environments in the midwest or south.
R0b0t1 5y ago
Higher wages. More market competition.
adam_arthur 5y ago
Price of labor is a function of supply/demand. Developers still in very short supply vs demand. But profitability sets a ceiling on how much you can afford to pay. It seems to me that if antitrust action were taken that really eats into FAANG profits, that industry pay would decline. Not overnight of course, but gradually in real terms. May still rise in nominal terms. Startups/companies have been forced to raise wages over time to compete with FAANG.
- larsiusprime 5y ago
  Unless of course deadweight loss from monopoly power n FAANG is causing the industry as a whole to be less productive and competitive. In that situation antitrust against FAANG could actually cause wages to rise.
  - heavyset_go 5y ago
    > Unless of course deadweight loss from monopoly power n FAANG is causing the industry as a whole to be less productive and competitive. It's this. Apple and Google control the entire mobile software market. They tax it excessively, to the point that they get a 15% to 30% cut of almost every mobile app transaction, and have for decades. If a business can't afford to give up 15% to 30% of their total revenue, forever, then they're effectively prevented from bringing their mobile apps to market. Apple and Google also effectively decide what apps are distributed to the vast majority of Americans, as their app stores are responsible for 99% of all mobile app downloads[1]. It's insane that a duopoly has been allowed to heavily tax and stifle innovation over entire markets in the mobile space for more than a decade now. The entire mobile app, operating systems and payments markets are dominated by two companies, and they're doing everything in their power to remain dominant, at the expense of consumers and healthy, efficient markets. [1] https://www.businessofapps.com/data/app-revenues/ https://www.businessofapps.com/data/app-revenues/
  - adam_arthur 5y ago
    Industry would be more competitive if FAANG were regulated appropriately IMO. But a lot of comp in tech is benchmarked against FAANG. Specifically if you are a startup trying to hire top 80th-90th percentile people. If their pay fell, I'm pretty confident the top end of industry pay would as well, despite more competition/productivity. Median pay likely unaffected. Even when you consider the low marginal cost to produce SaaS and similar, the same is true of any competitor. So you'd expect a highly competitive cloud (e.g.) landscape to be low margin despite low cost to provide. Looking specifically at Azure, AWS, Google Cloud... They become somewhat of a local monopoly over their customers due to costs of switching. The higher barrier/cost to switching to a competitor, the greater pricing power the company has. Even considering that the first choice has a lot of competition. Anyway, long story short, I think regulation that enables low cost of switching is inevitable in the longer run. As this provides the most competitive landscape, this highest net benefit to society. Would need to be crafted intelligently though.
heavyset_go 5y ago
The last time Adobe, Apple, Google, Intel, Intuit, Pixar, Lucasfilm and eBay got hit with antitrust action, engineer compensation soared and has been on the rise since. Ultimately, prices are not determined by costs, and that applies to the labor market, as well. [1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

djbusby 5y ago

I've been in tech since 1997, spent some time at MS (back in NT4,Win2k). The only wage pullback I've seen was dot-com implosion. It lasted maybe two years of slightly reduced pay.

MeinBlutIstBlau 5y ago

My lead has been working for 30 years as a dev and has told me his salary has been pretty consistent throughout so I don't believe that's the case. The coastal cities project absurd salaries but when I look at indeed across all of the US, 60-120k is pretty standard depending on entry to senior. If they got knocked down a peg, I highly doubt a lot of people working for google or microsoft would be vying for the lame boring "conservative" work environments in the midwest or south.

R0b0t1 5y ago

Higher wages. More market competition.

adam_arthur 5y ago

Price of labor is a function of supply/demand. Developers still in very short supply vs demand. But profitability sets a ceiling on how much you can afford to pay. It seems to me that if antitrust action were taken that really eats into FAANG profits, that industry pay would decline. Not overnight of course, but gradually in real terms. May still rise in nominal terms. Startups/companies have been forced to raise wages over time to compete with FAANG.

larsiusprime 5y ago
Unless of course deadweight loss from monopoly power n FAANG is causing the industry as a whole to be less productive and competitive. In that situation antitrust against FAANG could actually cause wages to rise.
- heavyset_go 5y ago
  > Unless of course deadweight loss from monopoly power n FAANG is causing the industry as a whole to be less productive and competitive. It's this. Apple and Google control the entire mobile software market. They tax it excessively, to the point that they get a 15% to 30% cut of almost every mobile app transaction, and have for decades. If a business can't afford to give up 15% to 30% of their total revenue, forever, then they're effectively prevented from bringing their mobile apps to market. Apple and Google also effectively decide what apps are distributed to the vast majority of Americans, as their app stores are responsible for 99% of all mobile app downloads[1]. It's insane that a duopoly has been allowed to heavily tax and stifle innovation over entire markets in the mobile space for more than a decade now. The entire mobile app, operating systems and payments markets are dominated by two companies, and they're doing everything in their power to remain dominant, at the expense of consumers and healthy, efficient markets. [1] https://www.businessofapps.com/data/app-revenues/ https://www.businessofapps.com/data/app-revenues/
- adam_arthur 5y ago
  Industry would be more competitive if FAANG were regulated appropriately IMO. But a lot of comp in tech is benchmarked against FAANG. Specifically if you are a startup trying to hire top 80th-90th percentile people. If their pay fell, I'm pretty confident the top end of industry pay would as well, despite more competition/productivity. Median pay likely unaffected. Even when you consider the low marginal cost to produce SaaS and similar, the same is true of any competitor. So you'd expect a highly competitive cloud (e.g.) landscape to be low margin despite low cost to provide. Looking specifically at Azure, AWS, Google Cloud... They become somewhat of a local monopoly over their customers due to costs of switching. The higher barrier/cost to switching to a competitor, the greater pricing power the company has. Even considering that the first choice has a lot of competition. Anyway, long story short, I think regulation that enables low cost of switching is inevitable in the longer run. As this provides the most competitive landscape, this highest net benefit to society. Would need to be crafted intelligently though.

heavyset_go 5y ago

The last time Adobe, Apple, Google, Intel, Intuit, Pixar, Lucasfilm and eBay got hit with antitrust action, engineer compensation soared and has been on the rise since. Ultimately, prices are not determined by costs, and that applies to the labor market, as well. [1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...