Yet, when I look at the data, Apple engineers get paid below the market average and they work at one of the most profitable companies of all time.
Well, then Steve had nothing to worry about, did he? Then why the secret agreement??
Exactly. The motivations behind this practice, the nature of the practice, and the individuals impacted by it are just horribly misunderstood and distorted because the story that big Silicon Valley success stories are making their fortunes by screwing over the "little guy" (whose base salary is at or above the 98th percentile nationally and well above the 99th percentile globally... and that's ignoring bonuses & equity) is just so easy to sell.
For one thing, it says that you are likely young. And I don't intend that as an insult.
So taking a few tens of thousands of dollars cut for ten years is that.
As for what planet I'm from... it's the one where the world isn't black and white and employers aren't automatically the guilty of any and all claims they ripped someone off.
There's no such thing as magic. This is just as true in economics as in anything else. If wages are down, then either labor supply is up, or someone is cheating.
It can't be too low as too "worry" the employee or to make him/her uncomfortable living in Silicon Valley
For the "paying less" I see it as backwards. Between working at Apple at X and SomeOtherPlace at X+Y the Y may not be worth it. And based on some places I worked, Y may be totally not worth it.
[1] http://www.theatlantic.com/magazine/archive/1982/02/have-you...
http://daviddfriedman.blogspot.ch/2013/08/diamonds-advertisi...
Well, that's the thesis of the article I linked: out there, in the free market, you wouldn't get much if you'd try to sell a diamond and weren't part of the supply chain.
I think Google has an extraordinarily high need for engineers due to their blatant attempt to take over the world by moving out ahead of everyone else in every industry they can reach.
When you're trying to corner markets that don't exist yet while also competing to keep other firms taking a slice out of your cash cow core business, you need a lot of R&D.
What does your friend do?