How Silicon Valley CEOs conspired to drive down tech engineer wages
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>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?
>if you [Brin] hire a single one of these people that means war.
Chizen's comment:
>if I tell Steve [Jobs] it’s open season (other than senior managers), he will deliberately poach Adobe just to prove a point. Knowing Steve, he will go after some of our top Mac talent…
Jobs sounds like a Grade-A Asshole, along with every other player involved in this mess. Makes me even less likely to relocate to SV than I already was. Though now I'm curious to know whether these wage-theft pacts extend beyond SV, perhaps to Austin... Many of the same players have a significant presence here. Seriously. If you've got info, hit me up.
"Jobs told him that Atari gave them only $700 (instead of the offered $5,000), and that Wozniak's share was thus $350. Wozniak did not learn about the actual bonus until ten years later, but said that if Jobs had told him about it and had said he needed the money, Wozniak would have given it to him."
*...told Jobs the good things these machines could
do for humanity, not the reverse. I begged Steve
that we donate the first Apple I to a woman who
took computers into elementary schools but he made
my buy it and donate it myself.*
By a certain measure of successful.
Funny how Jobs was the 'Bhuddist.'
(afaik there isn't a standard transliteration but I could be wrong as I often am...)
* Although, to be fair to myself, Apple only turned into its current form after he left.
At the risk of a hundred downvotes, I wonder how many people can see the parallels in the current silicon valley push for "immigration reform."
Having watched H1B farms style companies up close and personal, I can say there is very little to recommend about this model of employment, other than the CEOs like having a lower employee expense base. It might sound more exciting to hear the pitch from a wunderkind like Mark Z, but it's still the same story.
Norm Matloff of UC Davis has literally been trying to expose this for decades, with little luck:
http://www.cs.ucdavis.edu/~matloff/h1b.html
http://www.cs.ucdavis.edu/~matloff/h1b10min.html
Moreover: this is entirely consistent with behavior of employer first observed in the 18th century:
[I]n every part of Europe twenty workmen serve under a master for one that is independent, and the wages of labour are everywhere understood to be, what they usually are, when the labourer is one person, and the owner of the stock which employs him another.
What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little, as possible. The former are disposed to combine in order to raise, the latter in order to lower, the wages of labour.
It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it. In all such disputes, the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks, which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year, without employment. In the long run, the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.
Marx, you ask? No. Engles? No.
That's Adam Smith, Wealth of Nations
http://www.gutenberg.org/files/3300/3300-h/3300-h.htm#link2H...
This is plain wrong. You can very easily shift and people do shift. You just interview with a different company, just like a citizen would.
its not hard but no way is it as simple as being a citizen.
My preferred reform would be for H1B to be fully unrestricted. If you're going to allow labor into the country, let it compete on fully equal footing with domestic labor. For the reasons Smith articulates and you've either failed to read or are intentionally choosing to ignore, employers already have the upper hand.
A better balance of power would be to repeal anti-unionization laws such as the Orwellian (100th anniversary of his death by the way) doublespeak "right to work" (really: "right to fire, and disrupt organization attempts") and ensure that labor has the same access to collusive collective action and mobility as capital and finance.
Teaching opportunities are not good; there are far too many PhDs awarded compared to job openings for university positions.
It may be a benefit for private industry work, but remember that a PhD is primarily about showing you can perform rigorous scientific research, and compared to a Masters, matters less (or not at all) in jobs where research is not the focus.
I also saw the effects of the liberalization of immigration regulations in the 1960s which saw floods of foreign students, many Indian, Chinese, African, and others, which had profound influences on US academic institutions, the communities around them, and, to be honest, on their home countries, one of which was a brain drain.
On that last point: one of the arguments for increased global wealth and/or population is that it would increase the number of geniuses and intellectuals (along with the rest of the population, one might suppose). That's possibly true, but I strongly suspect that the existing mechanisms for recognizing and promoting talent have already encroached on much of those possible gains. Not all, but a considerable fraction. Which means that the additional benefit would be smaller than a naive estimate would suggest.
You can interview at, accept an offer from, apply for and receive a new LCA for another company all while continuing to work at your existing job. This means you have a new job and (preparatory documents for a new) visa set up before even giving notice and triggering the 10 day period. I know this from personal experience (on the E3).
More specifically: in a case where an H1B holder had concern for employer retaliation (say: working for a sketchy, illegal, or otherwise undesirable firm), and was looking for an option to leave (or possibly whistle blow), the fact that not having employment would be grounds for deportation within short order would be a constant threat.
I've known many people over the years who've had varying levels of frustrations with emigration issues. Many spent at least some of that time as undocumented, what some like to call "illegal", including working without authorization. For others it was merely the frustration of waiting while an impenetrable and slow process worked its way, with several having to make unavoidable trips out of country to be able to retain eligibility, often leaving work, friends, family, and homes for extended periods (sometimes with greater levels of support and assistance). And this isn't just a DESI situation: Europeans, Canadians, east Asians, doctors, programmers, healthcare professionals, researchers, nurses.
Most eventually settled in the US, some did not.
All had a considerable toll taken on them.
This is even worse if a company brings you in through some other visa like a TN-1 or L1 (NAFTA and Intracompany transfer visa respectively), and then make you convert to an H1-B before they will sponsor you.
A word of advice: Always use your own immigration attourney and not the one being paid for by your company. If the company is paying for it, the attourney represents the company, and not you.
Here's a link: http://www.tnvisabulletin.com/tn-visa-adjustment-of-status/
I've seen a couple of people do this, and it allowed them to skip the H1-B hassle. You just have to be honest and show that your intention initially is just to work and return to Canada, but your future intention is to become a permanent resident.
What I'd like to see is things like a complete national abolishment of non-compete agreements as a rider on Immigration Reform.
Conspiring to keep out immigrants is interesting (who doesn't want to pull the ladder up after we're safe), but it if we're honest with ourselves it's not appealing to our better nature.
Which is twice surprising since I've read elsewhere that he was very tight on his own privacy.
> Google, like the others, used a “salary algorithm” to ensure salaries remained within a tight band across like jobs. Although tech companies like to claim that talent and hard work are rewarded, in private, Google’s “People Ops” department kept overall compensation essentially equitable by making sure that lower-paid employees who performed well got higher salary increases than higher-paid employees who also performed well.
A positive skew will effectively reduce all employees wages
<snark ratio="0.5">My advice would be to make sure you could find a place to live there first</snark>
Even if SV were the best place to be an engineer, it's hard to imagine it being worth sacrificing 300 hours per year.
A 10 minute commute is 25% of that, which is 75 hours per year, which is still a lot. But for me, there is a huge psychological difference between a 10 minute commute vs 40.
Is it worth it? What are the benefits?
Currently I have a 20 minute pleasant bus commute to work, and I wouldn't go back to that commute. For me, it wasn't worth it.
If you plan to spend 8-9ish hours actually working, and another 10 per day on sleeping, eating, shower, and other such necessities, that leaves about 5 hours of real free time. A hour and a half a day of commute time is a pretty solid cut into that. 20 minutes of commute time is hardly noticable. Personally, I'd sooner take the 10 minute commute and have that mental seperation between work time and off time than have an extra 20 minutes a day and work at home.
Of course, now I live in the midwest and am hating the weather. My commute? Not so bad. But I miss the weather.
Just like Wall Street != actual street.
The big issue is that right now, $1200, even $1300 a month for a one-bedroom apartment in this area would seem quite reasonable, even a bargain. That's banana crazypants. In Sacramento you could get a two-bedroom, one-bath place with all the amenities for under $900 a month without looking too hard. That means that if you were able to telecommute three days a week -- maybe even just two -- it would cost you less to live in Sacramento and take the Capitol Corridor train in to San Francisco on your office days than it would to live pretty much anywhere in the Bay Area.
I'm not advocating that (the thought has clearly occurred to me, but I have too many friends here in SV to want to make getting to them that difficult), but I think it points to a genuine problem with the local economy. The median housing costs across the Bay Area show an implicit assumption that everybody is making Big Tech Money, but they're not -- and some areas are starting to get too expensive even for the people who are making top dollar. This just isn't a sustainable mix.
There are plenty of places with decent rooms you can rent for $800-1000. I paid $825 for my old place in South San Francisco (20 min commute to SF). It was a 2300sqft house shared by 3 others.
And, I think my larger concern about prices still stands. That $825 a month could get you a 1BR place with W/D included in many other cities. Actually, it could get you at least a 1BR/1BA place with W/D in many other cities, and we're not talking "middle of nowhere" type places, either. There are still certainly reasons to live in the Bay Area rather than those other places, but we're paying an awful lot for the privilege.
Just like Wall Street != actual street.
This is how the media and public use the term SV.
While housing prices are quite high, working in technology you are certainly able to afford the higher rents. The problem is when you don't work in tech and live here.
My findings were that startups there are extremely busy. They are slow to respond to emails, meetings and interviews are often missed/rescheduled, and salaries are relatively low (<100k). When talking to execs it became clear that they demand 45+ hours a week.
Compare that to Austin, Seattle, DC, Chicago, and Portland, who all have thriving startup communities that often match SV wages, and SV starts to look less appealing.
SV working conditions are not something a college grad should strive for. They should focus on locking down a nice salary with relatively cheap living costs, clearing themselves of debt, and growing their personal worth with side projects.
Also, the wages here in SV can not be matched anywhere else. It's economically impossible to pay someone a SV wage anywhere else. Economically impossible because if you're a business that has intentionally based your company in say DC then why would you continue to pay your engineers SV-sized wages. You'd be amongst the wealthiest people in DC if you were paid what a typical engineer is offered here.
>...your company in say DC then why would you continue to pay your engineers SV-sized wages.
Because you value great employees? I mean think of it this way. A lot of people can't just pack up ship and move to SF. But a lot people can! Companies keep their salaries on par with the valley to keep up. Granted the numbers aren't a science. It is hard to compare salaries in different areas but It has been my experience that SV wages are not that much more than any other city in the US.
> You'd be amongst the wealthiest people in DC if you were paid what a typical engineer is offered here
This is just blatantly false. Do you know how much government workers and politician minions make? It makes engineering salaries look laughable.
1.) http://www.indeed.com/salary/q-Web-Developer-l-Washington,-D...
2.) http://www.indeed.com/salary?q1=Web+Developer&l1=San+francis...
I do think that a developer getting paid 300k (not unheard of for top talent at top companies) in a place like Austin would be ridiculous.
I mean, Steve was a douche for a lot of other reasons. But this is savvy business right here. He had Chizen by the balls. Considering there's no mention of Apple intentionally trying to recruit from other companies in this article, I have to assume (until other evidence is provided, of course) that Apple was not doing such things.
To me it sounds like Steve knew he had the advantage, and he exploited that to keep his top talent where they were.
Savvy business and being a "douche" seem to overlap here.
Additionally, this is gossip and presumption.
You hear this same thing when someone is lowballed a salary number, or has to put up with some other annoying workplace condition, it's said the person should negotiate this all up front with the employer, and that the person's lawyer should get involved in the negotiation.
As if one person has any chance negotiating against a Fortune 500 company's HR department, legal department etc. (or the equivalent forms coming from some venture backed firm whose VC's lawyer's help with the HR legal forms). Especially when the heads of tech companies are united ( http://www.fwd.us ) to trying to flood the Valley with low-paid workers chained to the H1-B visa, driving down wages and shortening the careers of programmers ( http://heather.cs.ucdavis.edu/h1b.html ).
Now on top of that, we see that the companies are united in trying to drive down wages. It's not just one Fortune 500 company doing this, it's the management of all of them doing it together. Yet the idea of programmers and admins organizing to defend their interests? Well only complainers do that. Steve Jobs and Eric Schmidt organize for their collective interests, but any tech who did that must have something wrong with him - he's a complainer, lazy, whatever. We shouldn't be organized to have our interests defended.
It's a zero-sum issue with two potential beneficiary sides. There are those of us who work, and create wealth being screwed by this. There are those on this board who benefit from this exploitation and thus will pick at points in this article, in this post and so on. Why wouldn't they, they're the ones who parasitically benefit from this expropriation and exploitation.
There are programmers who love calling themselves "geeks", "nerds", "code monkeys" and promote boot camp style schools as well as myths such as "anybody can code" such that people think any homeless person off the street is a coder.
You don't get doctors and lawyers talking down their own skills or saying it's easy.
So much for being smart and logical, most will never apply this to anything outside of a computer.
And most will turn their noses up at the ethics which would have them converting their technical ability and wealth into long-term power. (To see how this could be done, look at the relationships and rent-seeking behaviour around startup incubators. Others are deftly stealing your lunch.)
The affordance which a software engineer now has will not last forever; power left on the table is power lost. As engineering becomes more commoditised (through education and simpler tools) the pay check will drastically decrease but the less-than positive terms will remain.
It's a personal choice that anybody can make to raise their opinion of themselves, to learn how an executive (and other professions) behave and to not accept less than they are worth. There's so much opportunity to be had. Nobody should be acting like a cog! You should all be playing greater games and constantly redefining what you believe you can do.
A hustler is just a social hacker; a hacker is just a technical hustler. But a human being, they are neither: they are whatever they wish to be.
The second is the cadre of elitist programmers who think they are more intelligent than anybody else, and that therefore if a programmer isn't swimming in money shoved at him by an employer it's because he's not good enough. The egos in the software world dwarf those in the academic world I come from (and that is, believe me, an impressive achievement). Hilariously, it seems to me at least that far more programmers fancy themselves a sort of Programming John Galt (or, perhaps, being a citizen of some Programmer's Lake Woebegon, where all the programmers are above average). They relish competition because they believe, erroneously, that they're working in a meritocracy and that their own skills are so exceptional they will definitely rise to the top anyway.
Doctors/lawyers interact with clients/patients a lot, so they dress to impress; whereas programmers only interact with other programmers or managers, who don't really care. If you're a programmer, the code you write matters much more than the human interaction around it (arguably the same can be said about doctors and lawyers, but a lot of people wouldn't hire a lawyer dressed in jeans and a t-shirt).
Also, there are external dress requirements. For example, a lawyer might get thrown out of court if he/she shows up in casual clothes.
This is the problem half the time. Nerds in childish t-shirts want to sit around pecking out code in isolation instead of taking full responsibility for their work by putting on a jacket and working the organization. This is why IT projects are consistently such disasters and why executives have the idea to get cheap grunts to do this stuff under a layer of middle managers.
The reason that programmers don't dress to impress is that their work product - the value that they add to other people - has nothing to do with their appearance. A programmer is paid for the software she creates; the user of that software has no idea what the programmer who wrote it looks like, and they judge the quality of it by what it does. So programmers have developed other metrics that they use to form a status hierarchy, notably the quality and difficulty of programs that you've written, but also things that are somewhat fuzzier like the technologies and tools you use.
Contrast this with a lawyer or salesman, where your buying decisions are directly influenced by how they present themselves and you often cannot directly determine the quality of their product. People in these professions have a strong incentive to present themselves well because customers have no other information to base their purchasing decisions on.
Certainly in the one metric shared across all professions - money - engineers at top tech companies are not being taken advantage of by management, nor are they "cheap grunts". A senior Google engineer makes more than all than about 2 of the salaries listed on the first page of a GlassDoor CEO search [1].
[1] http://www.glassdoor.com/Salaries/ceo-salary-SRCH_KO0,3.htm
That's completely irrelevant. The point is not whether Google engineers make enough money to be comfortable, or an amount that other people would consider "a lot", or anything like that. The point is that "all" the relevant big tech companies in SV colluded, prisoner's dilemma style, to pay them less than they would have if there were no collusion.
What good does it do anyone aside from the schmoozer and the schmoozee that some middle manager at Apple is good as schmoozing?
There are unions for cinematographers and editors in the media. Those are two terribly "nerdy" jobs, and the people who do them are, honestly, huge nerds.
Musicians have a union, and a pension system, and generally do pickup work rather than working for companies. And the musicians in that union are quite a mix of people ranging from "alternative" people (aka, cool nerds) and classical musicians.
Dressing is not important. Business casual is good enough unless you're working in an orchestra. You can be professional in jeans and short sleeved shirts. Most physicians in the ER dress casual.
However, when groups professionalize in the sense of restricting the supply of people to that job, they are benefiting their own in-group at the expense of society as a whole (customers, employees and shareholders, people excluded from the profession, and indirectly, everyone else). Tech workers intuitively recognize this, and professionalization is the antithesis of hacker culture. In fact, I would say that professionalization wouldn't actually help the nerdy people you are referring to. It would just bring in different people (of course the social justice movement is already working hard to eliminate hacker/nerd culture from the tech industry).
As this article shows, tech workers are fighting this issue through the legal system. Maybe a union will be needed just to deal with this issue. I suspect that the rivalry between Google and Facebook, and the fear of further lawsuits, will keep competition rigorous in the short term.
A tech employee gets offered $300k/year + options? He jumps.
Google's "double irish" has $3 billion more in revenue? Ho hum, just another day.
2. Since it is not a zero-sum game, it makes sense to avoid the corrupt, lazy actions that Jobs, Schmidt, et al. have embraced. Hackers don't need to "band together" – all that means is appointing some PHB and blindly following him. Society's behavior just serves to convince us that the hacker ethos was right after all.
Each of us will make our own decisions.
Each of us will weigh the costs, benefits, and ethics.
Feel free to start a union or just go straight to a political party.
We are decentralized. No thank you to all forms of government.
Well, I'm certainly convinced that pure optimism will trump powerful interests with huge financial reserves and far more influence with lawmakers and the media. How could this not succeed?
Edit: I see you're using Windows, so would you mind also listing your tech experience?
WTF? Please explain your comment. If I take it literally it sounds like sheer unadulterated bigotry.
I am hoping that I completely misunderstood you. If that's the case, I very sincerely apologize and owe you a beer or two.
I have strong feelings against Windows. I should have restrained myself.
I think you pegged me, but to my credit I'm no bigot, I just have a personal bias against Windows.
I think what triggered my hot button there was the feeling that other tech people have looked down on me because I use Windows. I don't like Windows either, I just dislike it a bit less than the other operating systems. :-)
Sincere apologies if I overreacted, and if you're in the Bay Area feel free to take me up on that beer!
I'm proposing a basic understanding of how markets work, specifically in this case how they can be distorted by a power disparity. Huge companies like Apple, Google, Facebook, etc. have an incentive and the means to do so, which means there needs to be some form of collective pressure to prevent that. This could be government regulation (i.e. what happened here), unions or something else but no ideological cult is going to make the problem magically disappear.
> Edit: I see you're using Windows, so would you mind also listing your tech experience?
I wasn't aware that pointing out the logical flaws in someone's argument required passing a shibboleth. I would also note that your observation could both be trivially answered if you put any effort into it so perhaps you should not be in the business of challenging the expertise of others.
However, I disagree with his generalization that H1-Bs are talentless compared to Americans (Just look at Goog). And that somehow they're paid lower wages. All big companies (MSFT, FB, GOOG) pay H1-B candidates the same salaries as their American counterparts. And they all go through the same interview process. Personally, I went to a top 20 uni here and paid $100k in tuition alone. It is true that bringing more talented H1-Bs will drive down wages, but isn't that a competitive advantage ?(None of the European companies have this advantage really and I think it's one of the main reasons for the valley's growth.)
What we need to rectify is fraud of H1-Bs. Come up with a white list of companies that can use H1-Bs and make sure there's no cheap, talent less labor. Don't let body-shopping, consulting and outsourcing companies like Infosys, Wipro be issued H1-Bs. Most people in the operations group running our service for instance are on H1-B and frankly, the work they do can be done by any average American working at a BK/McDonalds. The pie that outsourcing companies are eating into is really a gold mine that should be used to expand the American middle class. But the outsourcing companies themselves seem to have powerful lobbying in place (NASSCOM). So it is a hard problem.
The US is an intellectual, rational environment? What are you from Borat's country?
That doesn't make sense. If they can be easily replaced, then why aren't they? Wouldn't it directly benefit the company hiring them to not hire them?
Also, I don't like your characterization of people based on where they work. A person may choose to work in BK/McDonalds but that doesn't imply anything (positive or negative) about their capability.
In our cloud service, these guys are the first-line of defense in troubleshooting customer issues. They're the guys customers talk to and they follow a standard troubleshooting guide before pinging one of the on-call engineers. So it can't exactly be automated. And trust me, if that were possible, it would've been done. In a way, that's also one of the reasons this stuff is outsourced, companies don't want to go through the trouble of doing the hiring themselves for these roles.
> Also, I don't like your characterization of people based on where they work. A person may choose to work in BK/McDonalds but that doesn't imply anything (positive or negative) about their capability.
Sorry, I probably wasn't clear. That absolutely wasn't the message I was trying to get across. I understand working there doesn't mean anything about their capability and often it is a stepping stone to something greater (ex: college/high-school students). What I meant to say was the skill level here is the same. In effect, they just need to know their way around a machine and speak good English. Heck, they'd do a better job at it considering how poor the outsourced folks are at it. They'd even have more fun because there's still room for the occasional intellectual stimulation and creativity within these roles. And they'd be better pay too. Overall, it will be a better use of their time and they'd have more job satisfaction.
Of course, you do. Just vote with your feet.
Also this response seems to indicate that an individual's actions will hold any meaning against the concerted and united effort of employers. Unless a multitude of others act in concert we, the developers, will be at a disadvantage.
Does this happen on a small scale among handfuls of companies? Almost certainly, as we've seen. But how much impact it has at a more macro level is certainly questionable.
I have never seen companies trying to pay more then the bare minimum to get someone to fill the role. Being generous, sadly, isn't in the DNA of the majority of organizations. They always attempt to pay as little as needed.
Management and ownership has not only been organizing to protect their interests, they've even crossed the line into breaking the law, as they did here. They seem to have done well for themselves by organizing together for their collective interests, I think it would be a good idea for tech workers to take a page from their play book and do the same.
Why aren't we getting paid like lawyers? If they win $20M they will get paid at least $2M. But if we make a product that generates $20M profit, at best we get $20K bonus. This has to change!
Inequity, really has nothing to do with fairness. If the startup can't hire, they will offer more until they do hire (or go out of business or worse never achieve). What you can negotiate is based on your position. If you are ex-Google or Facebook you can make bank at a more established tech company looking to turnaround (cough.. cough.. Yahoo) or at a startup looking for "top talent" or get access to VC funding. It is the same dynamics you see in professional sports.
Is there a similar career path for engineers in any tech company that is the equivalent of "making partner" in a law firm? Genuinely curious.
On the other hand, have you asked any newly minted lawyers about their "career path" recently?
Or is it that specialized lawyers can make $350+/hr? In which case developers with certain specialities can make that much as well.
Also, the mode compensation for a lawyer is only like 55,000. The low population, insane compensation segment drags the mean way up.
The only real solution to this problem that I can see is for each of us to be so super smart and accomplished that we have the capacity to make a significant contribution that not many others can. And then develop the social skills to demand the kind of money that we (fairly) think we deserve.
Now, regarding your proposed solution of becoming a master of rare and difficult skills. That's what I strive for, but that can be a challenge in an industry where technologies are replaced every 5 years or so. In reality it becomes that much harder because unlike other professions the mindset of employers does not respect the concept of 'superstars'. Ie. I can't really name a developer that has the ability to command a 50% premium over his peers. However, I can name several companies that can demand a price premium for their consulting services. So, how do we as a field make the shift from companies achieving a price premium to individuals achieving a salary premium?
As an engineer, there is no such clear path. Most engineers end up working for 8 years and at the end are only making 150-250k if they are competent. Even if you make it to the management/architect level, you are looking at 250-400k.
Software Engineers are sadly not compensated fairly for the massive value they add to the economy. That's the bottom line. We need to work together to change it.
-Software developers typically aren't comfortable negotiating, nor are we well versed at it. Therefore, we accept job offers for less than we know we are worth and accept raises offered rather than negotiate raises based on our actual performance. -We have no collective bargaining capability, and anyone can enter the field. In Canada engineers have a professional designation, the software industry is typically not a part of that collective. Lawyers have the bar exam to pass before they can practice. These restrictions restrict the labor supply in those industries to ensure higher wages. In our industry anyone can join, even foreigners, or employers can even outsource the labor to another cheaper country. This has the combined effective of raising the labor supply, and reducing our ability to negotiate as a group. -It is difficult to measure the performance from one developer to another. Look at sales as an industry, it is very easy to measure a top performer. If we were better able to demonstrate performance it would be easier for a developer to earn 50% more than his/her peers. Where I live some shops that hire refuse to pay even 10% more for a developer because they are filling head count and treat developers somewhat like a commodity.
The above realization has left me a little jaded. I love this field, but realize that I can earn more selling software than building software.
So, for those in the industry we need to find ways to add barriers to entry so that our salaries are protected.
This argument for professionalization is fundamentally flawed because salaries are not suppressed by an excess of supply. Just look at all the companies who constantly have open headcount. If wage suppression in our industry were caused by an excess of supply, you'd expect there to be lots of unemployed software engineers—but there are barely any. You'd never see firms trying so hard to poach from competitors and agreements like this would be totally unnecessary (nobody bothers to recruit passive candidates if people are queueing up to get hired).
So, this argument for professionalization is completely flawed. Professionalization imposes a price floor but we're dealing with a price ceiling (firms unwilling to pay the higher market rate). In such a scenario, a price floor is completely useless.
Personally, the day somebody demands that I get a certification to be a software developer is the day I quit developing and go put my econ education to use on Wall St. At least in finance there's a pot of gold waiting after all the hoops.
However, there is value in operating more as a collective. Employees are uniquely disadvantaged when negotiating for salary. Employers have experienced negotiators, they know their salary ranges as well as the industry. While the employee has only the knowledge of perhaps a few of his peers, if that.
A professional organization could aid employees in their negotiations. That would be a nice way to start. I'm not entirely convinced that a 'bar exam' for developers is the right path. But, clearly as this article states we are being taken advantage of. In my experience the problem is larger than SV.
And yet sometimes it's seems the norm to do so anyway, even if there is no apparent reason why they would "need" to do so
The Yahoo COO who just got let go was paid $109 million in two years. He got a $29 million severance package. Would it be too crazy to suggest that maybe a brilliant engineer who was a major contributor to the success of a problem is worth more than $100-250k a year?
This is why traders and IT devs on Wall Street get better compensated: it is way easier to see the exact impact and it is very likely that those guys would be able to easily replicate it in any other firm.
If all software developers had the social skills of traders, we would indeed be paid much more than what we are now.
The issue isn't the absolute level of compensation, but the relative split between labor and management/capital. Exploitation is exploitation: a Roman house slave, though better than the majority of slaves, is still exploited and still a slave.
And why are you complaining about engineers wanting to get paid closer to the value they provide the company? It's no skin off your back: sure, it might eat into shareholder and upper management salaries, but they get paid in the millions, which even more people would kill for.
Every economic function involves risk, to both labor and to capital. There's no reason, however, that the majority of the value should go to capital. The economics of relative scarcity, possibly. But that's not the situation here: market forces didn't decide compensation packages and the return to capital, here. Collusion did, which is a distortion of the market from a situation of perfect competition.
Further, 240k for a data scientist isn't necessarily low, they are one of a team and the person who "made" Siri likely is paid much better (I could be wrong, as I do not know for certain).
Don't forget either that lawyers don't just 'make money', they 'prevent loss'. That $20M suit that ends in your favour also comes with a nice injunction preventing your opponent from doing -foo- again. Techies can't do that.
Remember the case, an engineer got lower wages just because he was from India? Also his boss was not allowed to offer him higher wages from the upper management.
The existing free market system is only free, if you understand it as "law of the jungle".
Is that really true? Their firm might get 2M. But in a big case, I imagine there are many lawyers and assistants involved. Sure the partners are going to do quite well. But, the founders of a tech firm also do quite well when their company receives a windfall of cash.
However a lawyer who wins a case or a sale person who sells a big deal can easily point to the quantifiable win to a specific dollar amount.
In reality, your salary as a developer is unbounded. There are plenty of examples here of engineers who have built their own software product businesses that bring in orders of magnitude more than the number you quote.
If you're good at what you do, there's really nothing stopping you from going out and getting that lawyer money. You just have to step outside the conventional path a little bit.
Employer's have salary ranges they will pay. If you want above that range you need to be incredibly special for an employer to consider, ie. a public figure in the industry.
If you are willing to take considerably more risk than an employee and are the 20% or so of entrepreneur's that succeed then your income can be unbounded as you say. But, that's substantially different than salary, and not what the article and this thread is about.
For example, demand in SF is much higher than Chicago so SF salary should be >> Chicago * cost of living adjustment. My guess is it's lower
I broke down some numbers awhile back comparing Seattle to SF, because a guy claimed that 80k in Seattle is the same as 200k in SF. Clearly not. Even after paying 4x my current mortgage I had thousands of extra dollars a MONTH of free spending money. Hardly the pity party I see from all the comments.
The productivity of a single programmer has famously increased as the rise of multimillion-dollar companies with less than ten employees shows. You still need the same number of nurses and teachers, though.
But we're talking about the tech employee's relative share of the company's own profits, right? which means cross-industry comparisons aren't relevant.
i'm sure this is the line the defense would take. I guess - we would be asked to believe that even though you have the collusion stated as plain as day, "it was not successful" - just talk. And that might actually fly.
but it's crazy to see the greedy underbelly of SV out in the open like this, although it fits with the aggressive ("legal!") tax avoidance strategies. (EDIT: IMHO both behaviors are forms of community theft, even if you don't consider your taxes to be a charitable contribution.)
I suppose it only feels like hypocrisy because of the lionization of our heroes. We expect more, particularly considering how they position themselves relative to their values - "think different" - "don't be evil" - more than just businesses.
50 years from now, once the tech equivalent of the iphone is in every object on earth, I suspect Jobs will be looked at as another Rockefeller - awesome, epic, business man, just not necessarily the guy you aspire to become when you grow up.
Not exactly. The key issue is not whether anyone made more or less money.
What is at issue is violation of US law.
As of today, conspiracy is illegal.
collusion: secret or illegal cooperation or conspiracy, esp. in order to cheat or deceive others.
Do you voluntarily pay more tax than you are legally obligated to? Likely not.
The effectiveness of such planning is not the deciding factor as to whether or not the people involved have behaved criminally.
As a parallel, planning to distribute illegal drugs is illegal (conspiracy to distribute). While actually distributing is an additional charge. Something similar is going to happen here, where the executives in question may have broken several laws only one of which is conspiracy.
I'm not a lawyer, so I could be wrong. But this is what I remember from Business Law during my MBA.
No he wasn't; comparing tech salary growth to other salary growth in the presence of a tech boom was completely disingenuous. Wages can increase relative to other industries, and still be being slowed by collusion.
It would be just as disingenuous if someone said we should measure it by whether tech companies' profit per-employee increased during the time relative to other fields, which would give the exact opposite conclusion.
Also, 'disingenuous'? Because he posited the idea that there might be data that could be brought to bear?
http://blogs.wsj.com/law/2010/11/10/on-googles-10-percent-pa...
That was something like 20,000-30,000 people, so if you consider it among the population of the 5 companies involved, it's extremely significant.
That was the largest raise I've received in a 13 year career in Silicon Valley, so I consider it anomalous.
But then you're back to the problem whether correlation is causation. You could conceivably argue that it was due to competition from Facebook, which was not part of those agreements.
In my opinion, salaries were depressed -- although how much and for how long is very hard to determine.
A sibling comment suggests that we look at salaries in tech companies that didn't collude. But that doesn't work either, because (1) those salaries could have been indirectly affected by the collusion, and (2) other tech companies are different than Apple, Google, et al -- most importantly, they have less money!
Against what litmus test?
All the players (Apple, Google, Intuit, etc) were blazing new trails in a whole new economic model - and localized to an economy in the SV. That is why the whole scheme wasn't apparent at the time.
And the scheme was apparent, to those who were paying attention. It simply wasn't being discussed in polite society.
Regardless of the effect, it is a shame to see that these leading CEOs, who for years have vociferously complained about media & telecom oligopolies for preventing competition, were for years simultaneously using their oligopoly to prevent competition for employees.
Apparently, they're all for free markets, except when it affects their bottom line!
Seems to be a trend in every discipline, why should Big Tech be any different?
See: Big TELCO, Big Banking, Big Oil, Big Ag etc...
(Yes, yes, there are the people who love competition even when they are competing, but I find that they are fairly uncommon.)
There is some information on, say, glassdoor.com, but it's anecdotal. Is there a reliable and high-res salary datasource?
What I meant to convey with that first sentence is that any effort at measuring the effect is bound to be highly politicized and subjected to endless debate, so it's best to focus first on the documented actions of these CEOs, which are objective facts.
The most relevant questions right now, I think, are not about the magnitude of the effect, but about the actions themselves: who, what, when, why, and to whom?
That strikes me as persuasive anecdotal evidence of what happens when a tech titan feels threatened by poaching that they cannot resolve by a gentlemen's agreement.
My recollection for the timing of those opening salvoes in the talent war was mid-2010. This would have been right after the DoJ told the cartel to knock it off.
I'll acknowledge off the top that that may be purely a coincidence.
Likely, compared to other industries tech workers were nevertheless handsomely paid, but I think this is still an example of abuse of power.
It's all the more worrisome because the changes in the nature of the stock market and so forth have made it that much more difficult for top tier tech workers to become rich. That used to be the pattern in the '80s and '90s, there are thousands of millionaires who worked at apple, microsoft, etc. for only a decade but were around during those companies' crucial early growth phases. Today I think that phenomenon is much less common except with extremely early stage employees. A lot of startups are the brain children of the sort of top tier techies who made it rich working at various vast growing companies. That variety of wealth is, I believe, very important to the vitality of the industry. But for various reasons it seems to have been significantly curtailed in the last decade or so, but if there is a more competitive marketplace for salaries in the tech field then that would go a long way toward bringing it back.
"Clearly the tech talent shortage can't be that bad, otherwise salaries would be going through the roof. I realize they may seem high relative to many other professions, however if we really are in dire straights, one would expect them to have spiked dramatically. That just hasn't happened. Either collectively the valley is colluding to not inflate wages, or, more likely, the problem isn't as big as many companies are making it out to be and those companies want to bring in foreign workers to help put deflationary pressure on wages."
I guess it turns out that was a false dichotomy and both things were happening. It looks like there was a conspiracy, and the tech companies still complained about not being able to find workers while pressuring congress for more H1-B visas.
My point is I don't think you'll be able to really get an accurate picture of how much wages were depressed because many companies are trying their hardest to decrease workforce mobility any way possible (legal or otherwise). I've personally seen some pretty crazy shenanigans at a very large tech company with workers being steered through insane hurdles to get a green card.
And I guess why not? If you can get someone to stick around for 5 or 6 years at a reduced wage, why wouldn't you do that?
Maybe if we could restrict those fields to others in the middle of a boom or otherwise in a fierce competition for talent...petroleum and other engineers in the oil industry in the past few years, for example. (though I'd wonder if the big players in that industry have similar pacts in place).
I don't know. It would be difficult to hold enough variables constant to make any useful comparisons but there might be something in the broad strokes.
1) http://www.bls.gov/data/ http://www.bls.gov/bls/blswage.htm
You want to use other fields as a control? That makes little sense. From 2005-2009 the tech industry grew at a vastly greater rate than most other fields.
What happened here is not even 'price-fixing', it's a fairly weak attempt at 'collusion'. Yes, it seems improper at first blush and the email exchanges are almost comically incriminating, but my guess is that it didn't really have a substantial effect on the engineer salaries write large (or even executive salaries). Agreeing not to cold-call employees is not the same thing as refusing to hire them; that latter would have had a major depressing effect on wages (kind of like if all MLB teams had a handshake agreement to never sign another team's free agent) but that clearly isn't what happened here.
It seems to me like the proof is in the pudding. If big tech companies are colluding to depress engineer wages, they're pretty obviously failing.
Anyway, I have no idea how this lawsuit will shake out, but I know that Pando Daily is doing a shit-ass job of reporting, and I regret clicking on the link and giving them the additional pageview.
How do you conclude that they're failing?
If crooks are trying to rob retailers, I don't see empty shelves at walmart so the crooks are obviously failing.
(I don't think it matters if Jobs failed or succeeded. The appalling thing here is that Steve Jobs attempted an extremely scummy and potentially illegal move.)
What form of success here qualifies as "weak?"
If big tech companies are colluding to depress engineer wages, they're pretty obviously failing.
You're going to have to show your work here.
what makes you think you aren't worth 10 times that?
Now apply this to the implication that these sv companies did not depress engineer wages.
you aren't paid in proportion to your worth; you are only paid in proportion to your negotiating power. if 50 other people can produce the same worth for your employer, you're going to be paid a lot less than if you are the only one who can produce the same amount of worth.
don't take this as an argument that you are being paid "unfairly" - you're not. just see it this way - you are worth much more than that. set your career sights a lot higher because you deserve it.
I thought HFT was going into rough times?
Sure, you're a drop out, but if you have an in-demand skill set replacing you is not going to be cheap.
Market price is market price. These companies are generating massive income. They are paying high wages (and colluding to avoid paying higher ones) because engineers are necessary to that.
The question you should ask during salary negotiations isn't, "Do I, based on my own value judgments and moral code, deserve this much money?" It's: "Are they paying me market price for my skills?"
If market price for your work is more money than you need or you believe you deserve, then take it and give it to somebody you think does deserve it. I promise you that if you let your employer keep the extra, they will not do anything better than you will with it.
Take the money.
Illustration:
http://www.wolframalpha.com/input/?i=profit+per+employee+app...
Remember this is net rev, what they take in after paying everyone. Assuming the average employee makes $120K, and given that they can't exist long enough to make $1 without the engineers showing up, these companies should be willing to pay everyone up to 2-3x that
Anyway, considering that employees also have equity, those numbers aren't obviously damning.
Nor are they particularly relevant, as "willing to pay" isn't the same as "market price"
It should be the same if aggregate engineer negotiation for compensation was efficient
either that or there's a glut of engineers on the market, which would seem to be the opposite of what we're always hearing
"a) never cold call each other’s employees; b) notify each other if making an offer to an employee of the other company, even if that employee applied for the job on his or her own without being recruited; c) any offer made would be “final” so as to avoid a costly bidding war that would drive up not just the employee’s salary, but also drive up the pay scale of every other employee in the firm."
I think it's clear how this would affect wages.
The key issues I see in the case:
1) they agreed not to do counteroffers
2) some of them shared salary data
3) they agreed to disallow active recruiting (cold-calling)
4) they agreed notify each other when hiring from each other
The third seems a little weak, but it definitely crosses the line when you combine it with the fourth (and emails between CEOs to stop hires that were already in the works).
It is absolutely clear that the market price for engineers in a free market would be much higher if there wasn't collusion.
And their efforts are evidently working, because otherwise Jobs wouldn't be threatening other CEOs with "going to war" over this. It's so important to them that they're willing to cut significant cooperative deals with each other.
This is the exact proof that software needs unionization and is not in any exempt from the worldly issues of labor anywhere else.
Yeah, it's illegal, and I don't have much sympathy for them getting whatever happens as a result of the collusion investigation, but it does seem pretty weak. The best proof I can think of that they were or were not effective is to look at engineer wages at companies that were not subject to these agreements, like startups. Most of them are probably too small to benefit from tech giants agreeing not to try to recruit their people, or at least stand to gain much more from paying excessively high salaries to recruit from those tech giants. So are there a bunch of startups routinely paying much more than normal salaries to hire top talent quickly?
It seems that would be more effective than fining the companies, or the usual "We don't admit to doing anything wrong, but here's some money anyways."
Apologies for the green account, but I would prefer not to have my real name attached to such a discussion.
This atmosphere--along with the kind of proprietary shenanigans that make it difficult or impossible to truly own your own hardware and software stack--is the very opposite of the hacker ethos that created much of the value these barons robbed from the economy.
It would be great if someone could prove me wrong.
I know personal anecdotes doesn't count for much, but I turned down several 80k offers in Berlin. I would expect salaries in Munich to be 10-15% higher due to cost of living.
You're right that 90k USD (~65-70k EUR) for a dev is not unheard of, but it appears to be the final stop on the salary train for that profession, unfortunately.
How is that relevant? (And) Once you factor in healthcare, education (for kids) and housing, I suspect that 90K USD in Berlin goes just as far as 200K USD in Silicon Valley, probably a lot further.
Healthcare is approximately the same cost now from what I've seen with ACA prices in the US. Education is still cheaper, but only if you assume an American student will have zero financial aid. I also doubt this lower price tag offsets the prices and regressive taxation elsewhere throughout the economy.
Germany has $6,000+ deductibles? Thin provider networks that leave out the good doctors and hospitals, and large or even unlimited out-of-pocket limits for out-of-network care?
Monthly premiums are just the beginning of the story.
But we don't need to compare ledgers to show that 80k USD in Berlin, Munich or Frankfurt won't go nearly as far as 200k in SV or SF. That's what exchange rates and the big mac index are for, and that's why I converted the currency to USD in my original comment. You can argue the rate is maybe 10 or 15% off, and I can argue for 10-15% the other way, but no way is a dollar (0.82 EUR) 2-3 times as powerful in Germany.
Are you using ACA? (I am.) Do Germans have to pay $500-$1000/month, maybe more if you're older, for a plan that pays almost 80% of their in-network costs? And speaking of those costs, how much is an endoscopy in Germany? Here I was just quoted $8000.
My point was that the cost of living here is also very high. Sure, there are EU/US trade-offs all over the place, but they are not anywhere near big enough for you (or the GP, or anyone) to just wave away a factor-of-three pay difference.
Btw, yes, last I checked my monthly premium is over 400€, so it cleanly weighs in within the range you name. I switched to private insurance because public 'Krankenkasse' charges a percentage of gross income, which would turn out to be even more. Not complaining, just answering your question in case you really wanted to know.
It's genuinely impressive how you contort people willingly giving their money to Apple, Google, Pixar and Lucasfilm for goods and services into them robbing money from the economy.
I've deliberately kept my account "low-profile" for exactly this reason.
I'm in SV and frequently rub shoulders with these people. Trust me, they're not ignorant. They've picked a side already.
But it's so much easier to play hardball with a new hire who doesn't know anything; thus this kind of thing is "ignored."
> But it's so much easier to play hardball with a new hire who doesn't know anything; thus this kind of thing is "ignored."
I don't know about that though: if I was, say for instance, in a line of business which benefited from skilled developers going into startups rather than established tech companies this kind of news would look like the perfect advertising to me—but I'd still want to keep my head down while it was being discussed.
Basically, the existential question of Old Money is one of taking as much as possible, whereas the hacker ethos operated on more of a giving spirit.
This whole story looks fairly damning, especially to Jobs and Schmidt, though that is probably the intent. Faced with a hiring war with 2005 era Jobs you'd have to have serious guts to refuse - like apparently the Palm CEO did.
Citation needed. Where do you see that it went to the people at the top and wasn't invested back into the company?
Regardless, I find it doubtful you could possibly prove such a thing, even if it were true. One just has to assume that such things helps the company, which in turn helps the people who profit from the company doing well.
I think the best comparison is Wall Street firms, where a disprportionate chunk of revenues are paid out as compensation to employees. There's longstanding criticism by shareholders that this outsized compensation should be reduced in favor of giving back that value to shareholders.
"re-investment" back into Google likely benefits such shareholders (the majority of whom are not employees of the company) than employees.
So, in that train of thinking, they double-dipped by helping the bottom line of multiple companies of which they profit from with their illegal agreements.
Remember how Jobs was considered such a good person for taking a $1 (or something low like that) salary at Apple? How much stake in the Apple stock did he have? He wasn't benefiting from a salary from Apple, but probably was from Apple's profit margins. Profit margins that likely benefited from such agreements.
1. http://www.sfgate.com/news/article/Tech-hiring-creates-other...
It's certainly in the interests of those REALLY on the right side of the gap to have tech workers believe they are on their side.
[1]: http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...
We accept lower salaries today because we assume that one day we might be in the ownership class. But this is somewhat reasonable, at least vs other forms of labor. (A line cook will never end up as a millionaire, but a developer might by either founding a startup or getting options on the right one.)
You're correct that tech workers are still workers--they're not part of the ownership class--but they're the lucky workers who are benefiting from the shifts in the economy toward automation/software/knowledge work.
[1]: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
This sort of shenanigans went on 100 years ago, but we couldn't study the consequences so tightly back then...it seems that Glassdoor's data, H1B data, etc provides a unique opportunity to study the effectiveness (or lack thereof) of such federal intervention.
We'll have to wait for another "boom" to see.
Connecting this to current events, this was also the start of SF's rent-and-eviction crisis. 2011 was when new grads started getting 6-figure salaries to work in tech, and experienced senior engineers started getting up to $250K/year in total comp. Turns out that when a large number of workers start getting big salaries in a region where the housing supply is basically fixed, much of that money goes into rent.
⚫ They all thought they could get away with it. The idea that there were no defectors on this basis makes me question the integrity of the entire tech industry leadership.
⚫ Nobody had faith in the DoJ's ability to to investigate, or a court's ability to place injuctions, on this behavior and/or retaliatory actions.
⚫ Everyone had dirt on everyone else, at least in iteration. It was an n-way Mexican Standoff. Every player felt at least one other had the drop on them. http://fixyt.com/watch?v=HzF_TbmDH5s http://www.urbandictionary.com/define.php?term=Mexican%20sta... As with the first instance, this does little for establishing trust with the industry.
⚫ The threat of encroaching action was too great. Any defector would be destroyed before the practice could be halted. There's one slim glimmer of hope here: It suggests that the threat of union action would be similarly disruptive and that a concerted action on the part of employees would in fact tend to succeed. The Achilles heel of the tech industry is that its capital walks out the door every night. If it realizes it can not come back, or merely threaten to not come back, it will have gained a great deal of leverage.
⚫ They simply didn't care. Arrogance, psychopathy, delusion. It doesn't particularly matter. Again, trust and reassurance are not promoted.
However does anyone think that this was the intention behind these agreements? Isn't it more likely that they wanted to stop an insane war on one another's businesses by buying off key employees to disrupt one another's operations? It would seem as though companies with a giant stockpile of cash - I.e. MS, Google, and Apple, could stifle competitors by just taking out key employees of their opponents with large signing bonuses, regardless of whether they intend to put them to work or not. The result would be a destruction of value.
I don't think it was the sole intention. But two things stand out to me that was part of the deal. The fact that the HR departments would inform each other if their employees were applying for a job at a company within the group; which by the way should be considered a huge privacy issue. Also that when an employee was made an offer, they only received a "final offer" to specifically avoid a bidding war. Those two things directly relate to wage suppression to me.
As for your example, that's quite true. But in the end it still stifles those employees' ability to increase their income because these companies directly conspired to not recruit from each other. It is not in the employee's interest to worry over if Company A wants to give them a pile of money to simply leave Company B but not work. Two companies coming to such an agreement for their benefit is a detriment to the employee, which is what the lawsuit is about.
Never mind the fact that the whole thing is clearly illegal under multiple federal and state laws. Therefore, their intentions are irrelevant.
Analogously, if 2 companies sold widgets, one in state A and one in state B, and they each had a near monopoly in each state, if they each made a closed door agreement not to enter into each others' states so they could each maintain their near monopoly, I think people, and courts, would certainly cry foul. Certainly competing would disrupt each others' operations, but the competition would bring better products and better prices to both states, and that's the point.
[1] http://techcrunch.com/2011/10/30/facebooks-zuckerberg-if-i-w...
I don't see any justification for your statement that better products would result from this.
Regarding "better products" do you mean in my analogy, or our real world case of companies competing for talent? In the analogy, the competition causes both company A and B to beat each others' products in order dominate the market (either by lowering price and improving the product). In the case of companies competing for talent, the "product" is really the overall compensation package. Some combination of salary, options, benefits, etc will attempt to be found that will keep the employee where they are.
With regard to better products, I hadn't understood that you were referring to the compensation package as the product. That makes sense as an analogy.
Your position makes sense, but I'm not at all sure that the market mechanism really optimizes in the way you hope.
From the article:
> George Lucas believed that companies should not compete against each other for employees, because ‘[i]t’s not normal industrial competitive situation.’ As George Lucas explained, ‘I always — the rule we had, or the rule that I put down for everybody,’ was that ‘we cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing.’
The problem is not the market value for an employees skills and experience that will enable them to contribute to whoever they are employed by, it is that there is also a value to simply disrupting the opponent's team.
I would take it further: In all industry, the trend goes one way: The wages of working people (including white-collar, I hope, that is the right word) have to go down, and the earnings from investments (pure money makes money business) have to climb.
There are only very few exceptions: One are lawyers, as mentioned in an other thread, and the other are people that work in the investment business (investment bankers, traders, ...). The reason for the second exception is obvious: their work is needed to make even more money from the money and every trick is played, to have the smartest, best guys getting the job done ... and get it done better and better.
Problem is: The whole thing breaks our society. Middle classes are already melting massively in many countries. The possessions of the worlds are concentrating in the hands of very few people more and more. Those people make our laws! The other people become poorer, even in the situation that the overall worlds possessions expand massively. The countries are already so much in dept, that many of them can not pay even the interest. Even the US is so much in dept, that there seems to be no possibility to get ever rid of it.
Nobody seems to realize, that while we are talking, investment companies are roaming the world for land, for houses, for companies to buy them, exploit them and throw it away when not needed (and not useful) any more. The wealth of the world gets accumulated in the hand of investment companies and the super-rich.
By rising the value of pure money investments, the value of human labor (to a more and more extend even high-paid and high-value labor) is degrading.
Serious question, is this generally considered a bad thing? Every company I've worked for has had salary bands that work like this. They don't make it a secret. Generally you know which band you're in and the range of that band. I've recently been told in a company meeting at my current workplace that they are mainly working to bring people to the middle of their bands. So if you're above the middle, expect a low raise.
On the other side, I can't help but feel underpaid since I've been told by people who know that the work I've done personally has allowed us to bring in more than 100 times my salary in recurring revenue.
Why is it that lines like this never quite make it into the comments section here?
Makes you wonder in what other ways Google has "not been evil" doesn't it.
Learn how to negotiate, use those job offers from above to practice countering on an offer. Realize that raises are negotiations too, and in negotiations before the raise comes you need to prepare your boss properly. E.g. Weeks/months before raise season remind your boss about your accomplishments. Remind your boss about your accomplishments, it's not bragging if you do it right.
Finally, just as you manage your career by learning technical skills you need to manage your career by learning soft skills, and other career advancing techniques. I wish I had books to recommend, but my lessons were all learned through mistakes.
⚫ Be ownership. Start your own company. You'll rapidly find that the same numerical collusion advantages which apply to large employers are even more applicable to VC and funders, and that the game they play is for control. Even Jobs got screwed out of his own company.
⚫ Opt out of the game. Welcome to the world of post-growth economics and the impact that has for wages everywhere.
⚫ Move to where hiring is growing. I've quoted Smith above on collusion. He also has advice for where to find rising wages: "It is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labour. It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest." (Wealth of Nations, Book I, Chapter VII, http://www.gutenberg.org/files/3300/3300-h/3300-h.htm#link2H...) So, if you can emigrate somewhere with rising employment, you'll do better. The problem of course is the same as for the 3rd option: growth is flattening everywhere.
⚫ Unionize. Good luck with that, as Silicon Valley has been hugely resistant to union organization, in no small part due to the contrary-to-their-own interests brainwashing of Libertarian indoctrination. Even if you don't believe it, I can all but guarantee that the suggestion of forming a union will bring the denouncers out of the woodwork. If you do want to proceed, find ways of removing them from the conversation. There are publications from civil rights, unionization, and nonviolent revolutionary movements detailing derailing tactics and how to respond to them. The Albert Einstein Institution's book list is a good start: http://www.aeinstein.org/english/ . In particular, From Dictatorship to Democracy. Studying how opposition movements are disrupted is also helpful. For these, go to the source. FBI's COINTELPRO and HOODWINK documents (the YELLCASING is their thing), the Lewis Powell memo: http://reclaimdemocracy.org/powell_memo_lewis/ http://billmoyers.com/content/the-powell-memo-a-call-to-arms...
⚫ Suck it up and accept it. You'll be making better bank than most salaried workers, at least while you're working. The rare superstar may do significantly better. Odds are good you'll work in startup serfdom for 10-20 years, then find yourself on the aged side of hip, or whatever the cool kids are calling it then. Assuming there is a Silicon Valley in another 10-20 years. There are a few bigger epochal changes on the horizon. At least having read this you'll begin to understand where you stand and how the game works.
They pay you enough to keep you happy, give you a few "interesting" problems to work on if you're lucky, maybe a couple of perks at the office. Why are you selling your soul to these guys in the first place? I just don't get why you'd be interested in making someone else rich for some geek-cred.
And in the end, pretty much everyone is working for someone to "make a few guys rich". Unless you're a completely self-funded founder or investor.
I accuse pandodaily of brain theft.
HN needs a kill file, I have truly never read an intelligent article from them.
The market is a lot more subtle than that:
1. Hackers are not simply mercenaries, esp. the best.
2. A decent % of the best are involved in startups, either as founders or early hires.
3. "Acquihires" are a mechanism for the best engineers to get paid more "outside" the system.
4. Aside from industry, there is competition from academia etc.1. Isn't this why large companies target the inexperienced, the recent college grad who is scrambling to make rent, or exploit people who can only live and work in the US if they get that job?
2. Some would say once you're a successful startup founder, you're "one of them" and the incentives become reversed. Do you think hackers who become founders still retain the hacker ethos? Why?
3. Because acquihires aren't fully disclosed, wouldn't the market function more efficiently if the compensation came through more normal means (salary and stock grants)?
4. Do you really feel like an academic path has competitive compensation to industry?
However, they are not the only players in the game, particularly recently. Y-Combinator itself started as a recognition of this paradox: while recent grads may be "struggling" to make rent (and in need of income), they are good at struggling (scrappy, risk-tolerant etc) and therefore ideally suited to starting a startup.
That said, I believe this particular lawsuit is more relevant to "proven" talent than students.
2. I think "hackers" will generally retain the "hacker" ethos, which I don't think is particularly tied to how they behave as founders or executives. I don't see "hackers" as any more or less benevolent or idealistic than the general population in the long run. In the short run, however, they are more likely to feel empathy since they were in the same shoes as their early employees more recently. From a more pragmatic standpoint, they realize more acutely that it will take a lot to get the best people to stay and contribute to someone else's dream.
Finally until they are formidable enough to engage in strategic discourse with the likes of Google and Apple, they don't have the ability to attempt such collusion.
3. Perhaps, but not necessarily. Acquihires might be a particularly good tool for talent discovery. There's also the potential threat that acquihires represent (if you treat us (engineers) too badly we'll just leave and you will have to buy us back 10x).
Your argument here is a good one, acquihires may reduce information available to all parties. However, this information asymmetry may work against the acquirer more than the acquired (or vice versa). I don't think there is enough data to confirm either possibility.
4. It depends on what you mean by compensation. In many cases (not all), the work may be more interesting and more importantly you (may) have more freedom in choosing what to work on. I qualify these statements because to get all the way to this utopia you need to get tenure, which is hard.
Regardless, you get to work with the best and most interesting people, which is a form of compensation. Also, plenty of startups come out of academia simply because it's like an extension of student life* (particularly grad students, post-docs and other non-tenured people).
* discussed in #1
Acquihires mainly benefit the managers/founders of the acquihired firm, not per se the "best" engineers
You would have to somehow compare data from these companies with companies outside the group. But even then, I'm willing to bet it would show little because these companies were the big guns in the area. Very few companies would be able to outbid them in wages in the first place.
Wage data is probably not really needed here. From what I understand of the law, the mere fact that they had the agreement was illegal. Meaning they didn't even have to implement the agreement, just that they made it. That they seemed to have implemented it and attempted to hide it only adds to their problems.
A non open (or not truly open in this case) kills demand. Without demand for a finite supply (high quality engineers) the supply's worth can never fully be realized.
If so that would seem to support what the plaintiffs are saying.
Note that this completely ignores the NFL's non-profit status ... why was that ever granted?
(I doubt the league especially factors into the terms of the contracts between teams and players, but the non-profit status is probably granted because the team owners extract profits and the league just keeps the wheels turning, there isn't an owner that makes money on the league itself)
As a middle class American, admittedly clueless, the education I've gotten over the past decade has been eye opening. And a bit late; I wish I'd learned this stuff years ago. But that is the dark side of being an engineer - the work and the creative aspects can swamp everything else. Other creative professions have this same basic problem, with the business major types exploiting them as much as possible. And basic Marxist theory is even more forbidden than rational thought about drugs in America...
i am not a raving Marxist, but after the last 4 years of my life getting shafted by one of the new crop of robber barons (an out and out sociopath) (yes, I have finally graduated from the Loser class (or been expelled)) it's... christ. Humanity is so tiresome. I've had some great bosses, mind you, and worked for some good companies. But the capital-labor relationship is fundamentally deteriorating and with the coming rise of automation and increased population and refusal to raise taxes and all these other social forces I see, the future looks very dystopian over the next 20 years. Things are getting such that the only logical position to take is that you incorporate yourself and thus you can act as sociopathic as you need to, given everyone else is acting the same. Does anyone with any sense want to live in such a world? I'd like to just do a good day's work, get paid fairly for it and not have to spend more time figuring out how to protect myself from getting screwed over - or figuring out how to screw over the next guy. I can't do my best possible work otherwise. I've got better things to do than play social games. This is something Ayn Rand touched upon in Altas Shrugged, as reviled as that book might be. Lots of capitalists these days are nothing but the social leeches that she railed against, despite their hypocritical protests to the contrary.
I guess I am a Marxist, or at least see the slice of truth about life and society that it reveals. There is a value in honest work, in creating something useful for society - that is something fundamental to being a real engineer. IT likes to claim that is a fundamental value of the profession, but I don't see that anymore (in general). There is too much money sloshing around. Things are getting out of balance. I can only hope the social strife prevalent in the 30s (go read some American history) comes about again - OWS and the protests in the Bay Area now are only the beginning. Then again, the resurgence of the fundamental social forces motivating the 60s that happened in the very early days of the rave scene got explicitly squashed by the authoritarian parts of the power structures in society.... Yes, I do have some stories.
Fortunately, climate change will smack humanity upside the head and force us to start thinking differently.
Well, at least I'm not an H-1B. I remember a postdoc on an H-1B who lived in a one bedroom underneath me and my roommate's from grad school, who was paying twice I was in rent and also trying to support a wife and two kids on an equivalent salary in this relatively expensive city (San Diego).
Enjoy your marxism.
I have left the system - I'm starting up my own biomedical/science research institute run off of actually humane principles - and so I'm, in the interim, unemployed. Luckily, I seem have some skill in the "free market" and so I'm financing this short break in employment off of investments I made (bitcoin, a handful of stocks) and am entering in 'hustle' mode - picking up whatever jobs I can to tide me over (you don't get unemployment benefits if you quit, even though you've paid into it). I'm much happier. When I do work, I know that what I'm doing is making a difference -if minor- in people's lives, not working to advance the agenda of a faceless bureaucracy doling out grants mostly administered by scientists who couldn't hack it in research and so went to work for the bureaucracy (dunning-kruger effect).
So in 3 months, the cost as paid by the capitalist pig has been fully paid for, and from then on, in perpetuity, there is nothing but $2000/month in profit that goes strictly into the piggy bank of the greedy capitalist pig. Meanwhile, I don't even get paid the $50 he owes me on time.
As a white collar professional who is doing _all_ the work, while capitalist pig goes on skiing vacations, this is really galling. Ok, I can quit or go work for someone else, or build my competing system (then get sued by the sociopath)... I think this shows how the pay of CEOs etc over the past 20 years has risen to astronomically insulting levels while everyone else who literally enables that is getting shafted. If the CEO does a whole lot of work, then I won't begrudge them some difference in pay. But such a difference compared to what they actually do in terms of effort? No, not when CEOs etc in general seem to be able to avoid responsibility for their screwups so easily.
The system is out of balance. It really has nothing to do with the amount of money involved.
But, you're right, I don't know what "Marxism" is. But, I suspect many self-proclaimed marxists haven't even read Das Kapital or the Manifesto, so at least I'm a little bit ahead.
[1] I will cop to not fully understanding what it generally means to 'control the means of production' but I blame Marx. It's kind of not a really well-defined idea, and he had a penchant for florid language, in places where he was compensating for not being precise.
As for your situation, it to me seems more like the corrupt quasi-totalitarian system involving oligarchs and Ayn Rand's "moochers" and etc - crony capitalism? It doesn't sound anything marxist to me - the Soviet Union was not communism, despite whatever they claimed. And America is hardly a democracy... People are fundamentally corrupt, especially when there is money and power involved.
Re: "control of the means of production" - let me explain it this way. In London, I got hired to build a website and somehow it turned into me being employee-ish #1 (and the only one) for a B2B startup. In my contract (one for contractors) was a clause about my ability to stop work and demand payment for late invoices at any time. But IT startup culture is not really like that - you get the job done, right? It is hard, and professionalism counts for everything. So in my mind, it was the nuclear option - I need to use that, then the relationship with my client has irrevocably broken down because step 2 is calling in the lawyers. But the CEO of this startup, who is a lazy, shiftless, and sociopathic bastard, leveraged that work ethic to the point where he was refusing to pay everyone's invoices (me and the salesguys) - "cash flow problems". But we still kept working, to keep the company running. While this bastard took skiing vacations - he and the other founder did very little work, really. All they did was put up a bunch of cash and had an idea and no skill what so ever relevant for the task, except how to exploit the workers and scam the customers with badly written contracts.
It all came to a head when one customer threatened to sue - he'd been flat out lied to about the nature of the data he was being sold. I fixed the situation - I was the engineer - and then demanded payment. They point blank told me to go fuck myself, deliberately breaching the contract.
This is when I realized I 'control the means of production' - I was the -only- person in this 5person company who could do anything useful of value. I was the one generating all the value (the code, the systems). I was labor and had been fucked over by capital, who brought nothing to the table except money. They didn't even bring a work ethic. Well, the salesguys, but their function was to take my output and get customers interested in it. All capital did was think up ways to exploit both customers and workers. So I controlled the means (because everything I did was the foundation of the company) and I did not use that power to my benefit to counteract the predations of the evil capitalist pig I was dealing with. I should have gone on strike; that's what that clause in the contract was for. But middle class white collar Americans don't have that mentality, and especially IT people. My introduction to the real world utility of Marxist philosophy was a harsh one...
Fundamentally, my mistake was not realizing I was my own corporation, and not an employee, and so had the responsibility of acting as sociopathic as need be in order to deal with 'corporations' or people who are doing the same. I hate doing that - it is not in my nature or mentality. I guess mentally, I am more working class. I prefer to cooperate with people than exploit them and I would guess this goes for most people in IT.
So what are you producing that other people higher up in the hierarchy are appropriating for their own and exclusive benefit? It sounds like you have decided to become capital yourself, which I encourage - today's ethos of engineers starting their own companies is a good thing, one that really wasn't happening when I started in IT. So hopefully the lazy capitalist pigs who do nothing but exploit labor can be cut out of the equation eventually... But don't exploit the people who work for you!
Seems like that would be the best way to get salaries closer to market rates - simply be proactive and always talk to other companies and get your company to increase your salary to stay.
That would be too much I guess :-)
Why? Because Google Bus Protests, that's why. This is a chance for the people and the engineers to line up, shoulder to shoulder, on the same side and take down the fuckers who've become the elite of this system.
The resistance begins.
The "astroturf" is fwd.us and peers.org are pure astroturf. You can't even get a political position out of them until their lobbyists have written the legislation and tried to insert it into some bill.
based on anecdotal evidence, top engineer salaries start capping out at 150k, when in reality this should go into the 300, 400, 500k range like lawyers and finance people make.
it's already starting to turn, so i'm hopeful.
i.e., not the stock lottery which doesn't apply to 99% of people.
Yes. Just because wages are high does not at all prevent them from being suppressed.
There's actually pretty strong evidence that wages are suppressed across the board in tech. In near-perfect labor market equilibrium, you'd expect employers to not have open headcount for extended periods because if they're unable to hire for a position they rationally increase its salary. Yet in tech you see many/most companies with near-permanent open headcount who still steadfastly refuse to increase salaries outside certain predefined bands.
Whether such behavior is consciously profit-driven or unconsciously motivated ("non-managers should never make more than $200k") I don't know but it's largely the reason for the longterm hiring crunch.
In a larger sense, argument isn't about what the affected workers "should" be paid, it's about who gets to decide: the potential recruits or their prospective employers.
As someone who believes that free markets generally "find a way" (in spite of information asymmetry), I'm hesitant to endorse the government's view point. One good thing that can come of this is more of these top-notch engineers get fed up with this sort of behaviour and start more startups. At the same time, I'm not going to shed any tears for Apple or Google if they lose in the courts.
The median salary would likely fall, the mean would likely rise (or stay around the same) but the very top salaries would rise dramatically, in line with what these same players make on the free market as brand ambassadors.
This brings to light an uncomfortable truth: incentives are not really aligned for the very top talent and the majority of workers. To extend the sports analogy, Roger Federer recently opposed spreading prize money more equally in the grand slams, saying essentially that players should win more to get more money. (right now tennis prize money is essentially a power law distribution).