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If some of the biggest employers in the bay area artificially cap the salaries of their workers, of course it will effect how other companies price their openin

If some of the biggest employers in the bay area artificially cap the salaries of their workers, of course it will effect how other companies price their openings. Three Hypothetical, but perfectly plausible conversations (no one would ever negotiate like this, but ignore that, these are inner motives/dialogs to some extent) Company: "And what were you thinking for starting salary?" Interviewer: "I'm at Apple now, I make X. I'd like 1.15X" Company: "Done! I was going to pay you 1.5X but whatever" or Interviewer: "My asking pricing is X" Company: "Well, I know DevOps people working at Google make .75X, so we will offer you 0.95X" or even more likely: Slightly drunk friend #1: "I really hate my job, and I'm only making X. Am I underpaid?" Slightly drunk friend who works at Adobe: "Nah man, I only make X if we hit our bonus numbers! At least its a stable job with benfits, unlike all these startups that flame out." Friend #1: "Yeah, I guess you're right."

gojomo 12y ago
I see, you have no evidence for sweeping claims of "Billions and Billions". You only have some 'just-so' stories and intuitions. But in each of your cases, a person checking compensation at just a few non-cartel places would do just fine. So, if the cartel employees and their friends in your conversations stay slightly-drunk/stupid/lazy, they'll keep working at rates lower than are available to them. Meanwhile, anyone shopping around gets paid a competitive rate, unaffected by the non-poaching agreements. I can believe there's some localized harm there, especially for long-tenured people at the cartel companies, but any damage is self-limiting. It's not massive on an "entire greater Bay area technology job sector" basis. Also note, these cartel companies were also constantly hiring from non-cartel sources, and there was no coordinated "cap" or "ceiling" on such offers. They had to win such employees in unrestricted competition versus both cartel and non-cartel companies – and they often did! Since employees talk (as in your examples), even long-tenured in-cartel employees would then get info about fully competitive compensation offers, and up their expectations for the next compensation-review. So again, any damage from non-poaching collusion faces practical checks on its magnitude. If you're an Apple/Google/etc employee who wishes you'd been cross-recruited with a big compensation offer, you have a right to be angry. (But, you're still probably not that angry, given how well things have been going for top employees at those places in the relevant era!) But if you've been employed elsewhere, your anger is misplaced. The non-poaching agreements didn't hurt you... and maybe even helped for the reasons I gave above.
- Iftheshoefits 12y ago
  Software engineers as a rule are grossly underpaid relative to the actual value they provide, whether they are employed at Google or Web Body Shop X in Podunk Midwest Town Y. Collusion of this sort is deleterious on the whole precisely because of the indirect but very much desired effects of wage depression, even if some individuals benefit and others are more disproportionately harmed.
  - gojomo 12y ago
    What's your evidence for "grossly underpaid"? Do all of the tens of thousands of employers meet in secret to hold the line against higher salaries? Are there laws against software engineers starting their own firms where they'd be paid their full value? Your claim doesn't pass the smell test. Pay levels are set by a giant, uncoordinated, massively competitive process. If you know any software engineers who are grossly underpaid for the value they can provide, hire them! Then "underpay" them just a teensy bit, instead of the "grossly underpaid" exploitation they suffer under now. Pocket the difference for yourself, as a reward for seeing their true value so much better than every other employer.
    - Iftheshoefits 12y ago
      Where is your evidence that pay is "set by a giant, uncoordinated, massively competitive process?" Pay is set by a variety of factors that generally favor the wealthy and connected, usually in such a way that workers rarely benefit from expanded wealth (wage stagnation). Additionally there is a coordinated effort (see: any Koch political outfit or its allies) to weaken and destroy unions, which are the principle means other than law that laborers gain in wages and working conditions. Moreover, there is very strong evidence in the form of the subject of this thread that pay is set, at least to some non trivial extent, by acts of collusion. It seems to me you believe very strongly in a black-and-white world where "the market" functions just fine. It is terribly out of sync with actual evidence, though, which you simply brush aside while scribing arguments containing numerous unsupported assertions and demands that others support their statements. As if we should simply accept your point of view as the truth by default.

gojomo 12y ago

I see, you have no evidence for sweeping claims of "Billions and Billions". You only have some 'just-so' stories and intuitions. But in each of your cases, a person checking compensation at just a few non-cartel places would do just fine. So, if the cartel employees and their friends in your conversations stay slightly-drunk/stupid/lazy, they'll keep working at rates lower than are available to them. Meanwhile, anyone shopping around gets paid a competitive rate, unaffected by the non-poaching agreements. I can believe there's some localized harm there, especially for long-tenured people at the cartel companies, but any damage is self-limiting. It's not massive on an "entire greater Bay area technology job sector" basis. Also note, these cartel companies were also constantly hiring from non-cartel sources, and there was no coordinated "cap" or "ceiling" on such offers. They had to win such employees in unrestricted competition versus both cartel and non-cartel companies – and they often did! Since employees talk (as in your examples), even long-tenured in-cartel employees would then get info about fully competitive compensation offers, and up their expectations for the next compensation-review. So again, any damage from non-poaching collusion faces practical checks on its magnitude. If you're an Apple/Google/etc employee who wishes you'd been cross-recruited with a big compensation offer, you have a right to be angry. (But, you're still probably not that angry, given how well things have been going for top employees at those places in the relevant era!) But if you've been employed elsewhere, your anger is misplaced. The non-poaching agreements didn't hurt you... and maybe even helped for the reasons I gave above.

Iftheshoefits 12y ago
Software engineers as a rule are grossly underpaid relative to the actual value they provide, whether they are employed at Google or Web Body Shop X in Podunk Midwest Town Y. Collusion of this sort is deleterious on the whole precisely because of the indirect but very much desired effects of wage depression, even if some individuals benefit and others are more disproportionately harmed.
- gojomo 12y ago
  What's your evidence for "grossly underpaid"? Do all of the tens of thousands of employers meet in secret to hold the line against higher salaries? Are there laws against software engineers starting their own firms where they'd be paid their full value? Your claim doesn't pass the smell test. Pay levels are set by a giant, uncoordinated, massively competitive process. If you know any software engineers who are grossly underpaid for the value they can provide, hire them! Then "underpay" them just a teensy bit, instead of the "grossly underpaid" exploitation they suffer under now. Pocket the difference for yourself, as a reward for seeing their true value so much better than every other employer.
  - Iftheshoefits 12y ago
    Where is your evidence that pay is "set by a giant, uncoordinated, massively competitive process?" Pay is set by a variety of factors that generally favor the wealthy and connected, usually in such a way that workers rarely benefit from expanded wealth (wage stagnation). Additionally there is a coordinated effort (see: any Koch political outfit or its allies) to weaken and destroy unions, which are the principle means other than law that laborers gain in wages and working conditions. Moreover, there is very strong evidence in the form of the subject of this thread that pay is set, at least to some non trivial extent, by acts of collusion. It seems to me you believe very strongly in a black-and-white world where "the market" functions just fine. It is terribly out of sync with actual evidence, though, which you simply brush aside while scribing arguments containing numerous unsupported assertions and demands that others support their statements. As if we should simply accept your point of view as the truth by default.