Big companies collude to hold down pay.
online.wsj.com
online.wsj.com
Some economists believe that banning such agreements could harm Silicon Valley's open, collaborative model.
If the existence of an agreement isn't disclosed to the employees, then the model is not really what it is always held out to be, but something more akin to private industrial policy. I don't believe this is any better for consumers than for employees over any length of time. I've personally felt (as a consumer) that tech & internet development have stagnated in the last year or two, notwithstanding the existence of new things; perhaps this is why.
Settlement or litigation, this is probably going to set off a wave of cross-hiring because firms will no longer have the security of the agreement in place when negotiating employment agreements, and turning away a candidate from another firm with good skills may look suspicious. Good for engineers, good for the local economy, probably good for innovation; not so good for CFOs and CIOs who like sleeping at night.
I'm guessing companies will settle rather than fight; but if not, it'll set off a sector-wide feeding frenzy in the market. This should make the rest of the year interesting. It's partly political, to be sure, but slow wage growth in a period of generally rising productivity per capita has been a source of discontent for quite a while now. There is a lot of pent-up frustration, and also a lot of companies sitting on cash reserves in search of a market signal; neither situation is sustainable.
Incidentally, Microsoft, IBM and Genentech are all said to be in the clear.
I can't reconcile those two clauses.
It's hard to articulate; I feel like I've seen the pattern before at least twice, and soon after there's a game-changing disruption. The two previous instances would the browser and web services. This time? Adaptive structural decomposition.
I think you're half-right, but the most exciting thing happening right now in technology are some of the expensive cool technologies turning into commodities. This doesn't have the "wow!" factor of new breakthroughs, but is an important step. Soon-ish (10 years?) everyone will own a smartphone, which means a computer in your pocket. That's pretty cool. Also, the mobile web stuff is pretty cool, and the ability to get high end scalable cloud hosting for relatively cheap is cool.
These aren't major breakthroughs the way social news was, the way better search was, the way better email was, etc. I do see less of those, but new competition and collapsing prices in cool technologies is a really good thing, even though it doesn't set off the wow factor so much.
Congratulations on stumping all of DuckDuckGo, Google, and my own linguistic inferential ability with that term.
My curiosity is piqued, might I ask for an elaboration?
Edit: Wait a sec, found something, this it?
It needs an essay-length answer, and I'm not quite ready to do it yet. And at that, it's conceptual, addressing my subjective view of content/interaction problems in different domains, and my equally subjective view that they're isomorphic to some other technical problems for which we have or are converging on solutions. Some might find it aggressively different, others a handwaving restatement of ideas that already exist. I don't want to be a tease, so rather than saying more I'll start making notes this weekend.
Unless the settlement or ultimate ruling has some enforcement teeth to it, it's unlikely that anything will change very much.
The goal is to avoid price wars and maintain some sort of soft price-fixing, but to do it all entirely publicly without direct discussions. It's not as blatant anymore as it used to be, but at its height (until some 1990s lawsuits), they were effectively conveying things like price-floor offers, e.g. "if you don't cut on route X, I won't either", but via completely public press conferences that openly said things like, "we're not planning to cut fares in the next 3 months on this route, unless a fare cut by Competitor A or B out of these hubs forces us to".
Banning such secret agreements would harm an "open" model? Irony, anyone?
If CA courts had held non-compete agreements to be enforceable, "Silicon Valley" never would have happened as the free flow of technical expertise never would have happened.
These companies are trying to bypass the legal system by conspiring to make their own arrangement of "non compete agreements" without the knowledge or consent of the workers.
In fact, it's only a tiny minority of people who care whether their political principles are consistent or not.
http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTa...
Pylab made me a nice graph of total comp (based on tables 6.2D and 6.4D from http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected...):
http://yakkstr.com/posts/791-This-is-whats-wrong-with-Americ...
http://www.washingtonmonthly.com/archives/individual/2007_10...
Please show your unflawed version and tell me what point you think it is making.
http://www.minneapolisfed.org/publications_papers/pub_displa...
The key graph: http://www.minneapolisfed.org/pubs/region/07-09/figure2.jpg
I take it we are in agreement?
"Wage growth rates at the 10th and 20th percentiles were only slightly below the median growth rates, increasing by 17 percent and 18 percent, respectively."
http://www.minneapolisfed.org/publications_papers/pub_displa...
"As noted, some economists have argued that relatively large wage gains at the top end of the wage distribution drove the increase in average wages, while median wages grew little if at all. I have shown that, in fact, median wages increased appreciably since 1975—by 28 percent—once benefits were included"
When he says that median wages increased, he is including the insane amount healthcare costs have risen. He is counting what employers pay for health insurance as compensation for workers. This makes sense on some level, but it also makes it clear that the take home money of average workers has stagnated while it has sky rocketed for the super rich. The fact that employers are paying more for healthcare (and we are paying more for it too) is not a sign that things have improved for average workers, in fact it's a sign of the opposite.
2000 non-wage compensation per employee is (Stats taken from your first link and 6.2C): (615,931 * 1,000,000) / (137,228 * 1,000) = 4,488 per employee
2009 non-wage compensation per employee is (Stats taken from your first link and 6.2D): (1,072,019 * 1,000,000) / (136,089 * 1,000) = 7,877 per employee
Your graph shows an increase of close to 20,000 from 2000 to 2009. If wages were stagnant, non-wage compensation doesn't explain this increase.
Edit to add: if you look at private companies only, which seems fair given this article is about collusion between private companies, the numbers are worse than those mentioned above:
2000: (424,680 * 1,000,000) / (114,597 * 1,000) = 3,705
2009: (690,975 * 1,000,000) / (136,089 * 1,000) = 5,077
(Using this inflation calculator: http://www.westegg.com/inflation/infl.cgi)
Also, since the article is about collusion between google and apple, we should really be comparing compensation for the best programmers. I admit, I have no idea whether that went up or not.
I'm just saying that what's sauce for the goose is sauce for the gander. Sometimes the wider economy favours the employee, sometimes it favours the employer, that's all.
(And, often, the industrialists were colluding with local governments in addition to each other, making it even worse; especially during the period of the "mine wars".)
I don't really like unions, but collusion like this is an understandable reason to form them: if the companies are all agreeing behind closed doors to do X and not do Y, the only real ways to force them (since they've removed the ability of market competition to do so) are to either: 1) pass a law banning the objectionable practice, e.g. California's prohibition of non-compete agreements; or 2) get a large enough group of people to all agree not to work for any company unless certain terms are met.
Perhaps developers with significant amounts of open source work could be identified but I'm sure that for every one of those there are several amazing developers who are instead working on proprietary stuff.
We wasted weeks holding meets to architecture something he already had in place, grrrr.
He wasn't a child, but a grown man with gray hair. Not exactly a prima dona either; he will happily talk to you for ours about your build problems and give you all the help you need. He was just not very good at communication. He was a fake "yes man"; he says yes to every request and suggestion, but somehow only his more sensible ideas end up in deployment.
I don't think someone who is 10x as productive, but emits zero feedback or communication is worth the trouble of poaching from others, specially of you're a big corp. Give him 10x market rate and let him bootstrap a startup all by himself, sure, but this particular guy would suck in a team environment.
He really didn't fit any "hacker" stereo-type either. He was a fit soccer player / yogi, worked strictly 9-6, and had a taste for illicit leisure .. I think.
I should know: I'm a B+ player.
And, if by "illicit leisure" you mean "smokes the herb", I think you'll find that alot of guru type hackers are WAY into that kinda stuff. In fact, at my company, our HR technical recruiter once said that if corporate all of a sudden started random drug testing, half of the developers would be gone before they could read THC on the LabCorp printout.
Year ago we were getting our second round of VC investment from a group of companies that included an American VC company (we were in the UK and our first round had been from UK VCs only).
I remember saying to our dev team "these guys want compulsory drug testing for all staff" (I was joking) - the looks of horror on the faces of the best developers in the team were priceless.
He also had a deeper sense of memory. I was only a contractor and worked with them briefly, but from what I have seen, he was the one most aware of what has been tried before and failed. For example, his team made an impulse decision to outsource some chunks of the platform to a 3rd party app, but he was able to connect a few dots and point out that the 3rd party app uses a SOAP library, which in turn uses an http client lib, which uses something else, which they found to be non-reenterant .. or some such.
The rest would have discovered this later and ended up patching it, while he is able to make good decisions right from the start. It helps that he was super specialized, and done nothing but C++ and PHP, on Linux, for the last 15 years; while everyone else on the team had a broad encyclopedic knowledge of a lot of stuff.
This is probably why he was so much more productive. I've personally turned off notification on my email and tend to set my IM to "away" because it's too distracting to productivity when people can just interrupt me at any moment. We already have a bloody meeting every morning. What ever you have to say can certainly wait until then. I wonder if anyone has done a study of how much money has been lost to these "open plan" working environments.
Expecting small companies with very little capital to throw money at developers because big companies are being "bad guys" about something and "good guys win" is... not very realistic.
If these allegations are true the big companies involved are effectively controlling the rate in the entire market (this would include rates in startups and other smaller companies). Why would smaller companies (with less money) start throwing more money at workers than companies that could actually afford to do so but choose not to unless someone twists their arm?
> They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer.
> They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer.
It seems like they want to build their business on deception, and hope that the employees can't figure out where is a better place to work, instead of what I interpet as an honest solution, being open and allowing people to choose where to work based on good information, and then trusting them.
Seems to me that these agreements might interfere with that, although the article does not seem to give enough information to tell exactly how they were structured.
Yes, a person does, but I don't think that question really gets to crux of the matter. I think the question is whether these companies were forming a cartel of sorts. Not a cartel of widget or oil production, but a cartel of jobs production. Its actually not clear to me that existing anti-trust law covers this case, and, from the DoJ's actions, it isn't clear to them either.
If the Justice Department was confident of its case, we'd be seeing a lot more publicity in order to put pressure on the companies involved. The fact that DoJ isn't raising a ruckus over this means they think they have enough to go to trial, but not necessarily win. In circumstances like these, where the law isn't exactly clear on the topic, both sides seek to settle because neither wants to be proven wrong in open court.
It seems to me like the principle should be similar. If a company has an exclusive-vendor agreement with an engineering-consulting firm for all its engineering services, that seems very much like the case where the company has an exclusive-hire agreement with an engineering union for all its engineering employees (just think of the union as a labor-selling firm). In both cases they've agreed to only purchase a certain category of services from a certain category of providers. I'd be somewhat amenable to banning all these kinds of exclusivity agreements (including non-compete, no-poaching, union-labor-only, exclusive-vendor, etc.).
Yes, but it's a negative right, not a positive one. There needs to be a willing purchaser of his labor, and they have the same negative rights.
What was being done by the companies is an informal arrangement to make non-compete agreements exist even in the cases where the employee didn't sign one.
Notes: 1 - Pretty much the only non-competes upheld in CA courts are ones where the signing party sells a business or is a major partner.
But not so good that all these other companies had no poaching agreements.