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Comment by iqster | Hacker News Reader

It is very hard to give numbers. But I think it is hard to argue direction though. If there was a no-poaching agreement in place amongst a "cartel", would salaries of the employees of the cartel be higher than normal? Certainly not. They could be the same (assuming there is a sufficiently large number of non-cartel employers) or lower.

This sort of argument is often made in Economics, and is logically sound. Ceteris Paribus aka everything else being the same.

I agree the article smells of link-bait. I don't understand why Facebook's IPO is different from every other IPO that has happened in the past. Why does the author feel that this IPO will raise wages of developers in the valley?

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Direction doesn't matter if magnitude isn't significant, and we have no evidence that it is. This is just a variant of argument from ignorance (http://en.wikipedia.org/wiki/Argument_from_ignorance).

To claim that it's unclear what the effect of a no poach cartel is on engineering salaries is at the same time to claim that it is not necessary that there should be legislation preventing no poach cartels from existing.

Do you believe this to be the case? If so, do you really mean to say that engineering salaries should not be set by market forces?

PG is just saying that if it had been a competitive market we dont know the extent of how much it would have increased engineering salaries. Thats true.

However lets take the case of NEw York where you can get program trading jobs for $300K and I have friends who got these kind of jobs. Hedge funds routinely pay $250K plus.

I think this is what would have happened in the valley.

That sounds like a reasonable assumption to me also.

Which companies are paying this, and what type of software are they making?

Trading companies. They're writing software in house to control stock trading (or that of any other financial instrument that's on the market. The software is so directly responsible for profit margins that the companies are forced to be very competitive with their compensation.

I was hoping for a more specific answer. I currently work at an algorithmic trading firm making software that trades securities, but I didn't find a position like this at $250K/year.

Algo trading at the bigger banks. Any head hunter in NYC can help you find such a position.

I don't think that at all makes sense. The finance business in general distorts pricing. There are a whole host of professions that pay significantly more in NY than they do anywhere else.

Does asking for evidence that a murder attempt succeeded imply that one thinks murder should be legal?

There is evidence that collusion in the job market does not necessarily have an effect on wages: http://ideas.repec.org/p/esx/essedp/626.html. Interestingly enough, the research "provide[s] strong evidence of a negative effect of collusion on labour productivity growth"

It doesn't seem to relate to this situation at all. I could only make it through about 15 pages due to the author's writing style.

Collusion for these firms was price-based collusion for products, not collusion to suppress the input costs of highly skilled labor. Manufacturers are said to have engaged in establishing minimum or fixed prices for their products.

Consumers will tend to absorb this form of market inefficiency. After the cartel agreements were broken, consumers reaped the benefits in the form of the "intensification of price competition" (lower prices).

It suggests that only in one case was there collusion in R&D, which might be a relevant example.

Additionally, the article cites outside competition from the USA as a factor. Competition from foreign sources on engineer wages such as India is still nascent. US manufacturing during this period was mature and robust.

> I don't understand why Facebook's IPO is different from every other IPO that has happened in the past.

its important because FB is the biggest social network on the internet. Believe it or not, many people still dont understand or get what "social web" means. Having FB stock publicly traded (company more transparent) and strong earnings would prove to the masses that web and social net is sustainable AND profitable AND here to stay. And it already works! look what happened with Zynga stock after FB IPO papers hit the daylight.

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