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I don't think that explanation quite works. There are two cases: 1. Companies in the Google/Apple/MS cabal 2. Other companies Companies in 2 can always just

I don't think that explanation quite works. There are two cases: 1. Companies in the Google/Apple/MS cabal 2. Other companies Companies in 2 can always just pay more for what they want, since they're not governed by the cap. If they did that, of course, they could pull a bunch of people away from 1 and the price level would keep rising. That didn't happen because (mostly) only companies in 1 are able to pay at near the cap level anyway. So there might be inefficient hoarding, but it's just companies in 1 hoarding from each other. It doesn't analogize exactly to, say, anti-gouging price caps for gasoline in a snowstorm (which, I agree, lead to terrible shortages and inefficient allocations), because this is equivalent to the gas stations setting a price floor (people shop at places with the lowest prices but work for the place with the highest wages). And then some gas station down the street opens a gas station with prices lower than the floor...

foolinaround 13y ago
If a company in category 2 (in the above ) pulls enough weight to make a significant change, then the companies in category 1 will add this company and pull it into category 1. Said company would gladly go along since it benefits as well.
TheCoelacanth 13y ago
Sure, but look at which category the companies complaining about shortages are in.
- icambron 13y ago
  I assume you mean 1. But if they're complaining they can't get enough engineers, it can hardly be that they're also hoarding them, right? At the very least, the companies that are a) paying the most and b) looking for ways to access a larger labor pool have got to be using the engineers they have at near maximum efficiency. Otherwise, those would be weird levers to pull. They actually are the companies that in an honest market get the engineers anyway; they already pay at the top of the market. That they've dodged paying for it in full doesn't change that.
  - lhc- 13y ago
    If you look at it from a more negative perspective though, lobbying for more H1-B visas is an even more effective way to decrease engineer compensation, because you can reduce your salaries further by increasing the pressure on US engineers by threatening them (implicitly or explicitly) with losing their jobs to cheap foreign labor. One could easily argue it looks like two sides of the same coin: using every dirty trick available to avoid paying engineers according to their actual value to the company
    - icambron 13y ago
      I'm completely willing to believe that big companies have poor intentions when lobbying the government. H1-Bs are just more market distortion. (I personally believe we should just hand software engineers green cards at the airport and remove the cheapness from foreign labor. More engineers, but without the bullshit.) I'm just saying it doesn't make the engineer shortage less real. All the ways you hold down salaries are ways that companies are dodging honestly dealing with a legit shortage.
kvb 13y ago
Have I missed some news, or is your inclusion of Microsoft in the cabal erroneous?
- icambron 13y ago
  From the article (quoting Pando): > ... what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP You can also see Microsoft in the screenshot of Google's "Do not call" list.

foolinaround 13y ago

If a company in category 2 (in the above ) pulls enough weight to make a significant change, then the companies in category 1 will add this company and pull it into category 1. Said company would gladly go along since it benefits as well.

TheCoelacanth 13y ago

Sure, but look at which category the companies complaining about shortages are in.

icambron 13y ago
I assume you mean 1. But if they're complaining they can't get enough engineers, it can hardly be that they're also hoarding them, right? At the very least, the companies that are a) paying the most and b) looking for ways to access a larger labor pool have got to be using the engineers they have at near maximum efficiency. Otherwise, those would be weird levers to pull. They actually are the companies that in an honest market get the engineers anyway; they already pay at the top of the market. That they've dodged paying for it in full doesn't change that.
- lhc- 13y ago
  If you look at it from a more negative perspective though, lobbying for more H1-B visas is an even more effective way to decrease engineer compensation, because you can reduce your salaries further by increasing the pressure on US engineers by threatening them (implicitly or explicitly) with losing their jobs to cheap foreign labor. One could easily argue it looks like two sides of the same coin: using every dirty trick available to avoid paying engineers according to their actual value to the company
  - icambron 13y ago
    I'm completely willing to believe that big companies have poor intentions when lobbying the government. H1-Bs are just more market distortion. (I personally believe we should just hand software engineers green cards at the airport and remove the cheapness from foreign labor. More engineers, but without the bullshit.) I'm just saying it doesn't make the engineer shortage less real. All the ways you hold down salaries are ways that companies are dodging honestly dealing with a legit shortage.

kvb 13y ago

Have I missed some news, or is your inclusion of Microsoft in the cabal erroneous?

icambron 13y ago
From the article (quoting Pando): > ... what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP You can also see Microsoft in the screenshot of Google's "Do not call" list.