Engineers Allege Hiring Collusion in Silicon Valley
cnbc.com
cnbc.com
I think this is a pretty narrow minded view. If the economy needs a particular skill set to grow then the wages for that skill set need to rise with demand so that market actors (Students) can choose the correct profession and supply the economy with the skill set it needs so it can properly grow and create the products everyone wants.
If the largest employers in the tech industry manipulated the market to keep salaries artificially low, it hurts not only the employees directly involved but also other people employed in the same industry who use average salaries to make employment decisions, students who are trying to decide what career to pursue in school and the economy as a whole which is unable to get the required labor it needs.
As with the professional athlete situation, sometimes the only way to stop salaries from being artificially suppressed is to band together to stop it. This is what the recent class-action lawsuit against Apple, Google, and other big companies is about. If things get really bad, programmers may have to form a union or a guild to continue getting paid anything close to what they are worth. Forming such an organization will no doubt be very difficult due to the fact that many programmers exhibit a strong (and in many cases, misguided) belief in their own rugged individualism and in Silicon Valley's meritocracy. This belief wrongly leads some programmers to conclude that they don't need to protect themselves, thus leaving them open to collusion from their employers.
For a cautionary tale about what happens when people miss out on the chance to organize when they really should, look no further than the Hollywood visual effects industry. They are the only major aspect of feature film production without organized labor, and consequently their work is routinely underpriced to the point of VFX studios going out of business as a matter of course during a film's production. The same thing could easily happen to typical Silicon Valley programming work. (In fact, it's already quite close to that situation when it comes to programming in the games industry.)
Ultimately it would be a short term (<10 years?) profit for the people in short supply until the graduate engineers caught up to the demand.
I wonder though if this would cause a huge brain drain on other parts of America.
In addition, I very much doubt Silicon Valley has the cost-of-living-adjusted highest average wage.
http://topics.nytimes.com/top/reference/timestopics/people/s...
Everyone is taking an economic hit so that a few executives, VCs, and landlords can exploit (what the free market says is) one of the most highly productive fields around today.
Considering that takes into account ALL employee wages if you were to hone that number to "per engineer" it would be several multiples higher.
If truly removing collusion left a free market would the top quadrant jobs see a 2x improvement?
And how would startups fare if the $$$ in engineering roles doubled @ the big valley firms?
Short term less as people flocked towards the cash?
Long term more as people built more dry powder to try it on their own?
(1) http://nypost.com/2014/02/28/apple-has-biggest-slice-of-prof...
That number doesn't mean anything though. Employees' salaries aren't based on profit unless they are paid entirely in company equity. You can't have it both ways where you get income when the company isn't making money and you get the extra profit when it is.
But it sucks for the tech workers. Not going to call me at my desk and try to get me to switch companies? Fine. But if I went to work for Google, it would suck if that put me on some kind of blacklist at all the other companies. It seems like they've crossed an ethical line here.
From what I do know about food creation, there is a huge surplus of candidates and people with jobs are happy to not be washing dishes. (My sister was considering a $60K degree in baking and that was the summary that graduates gave her.)
So the GP comment seems to be making a valid point. If you have some insight into the "local artisan bakery" world, share it with us instead of providing an slightly insulting, information free, apparently offended comment.
In an environment like that where money is not scarce but engineering skills are, how can the salaries not climb and how can small companies even DREAM of competing? Or course the big players don't want to get into a bidding war because they know both sides can afford to pay a lot more.
One of my recent jobs was VP of Tech for a small startup. They offered me what they could afford plus equity. The product they were working on was not going to be Facebook size. I think realistically they could have had a 100 million dollar buyout in 5ish years if everything went well. OR they could have gone broke. They gave me 1% of the company in my package which is huge, but that means I'm gambling on the success of this startup for a hopeful payout of 1 million dollars in 5 or so years. At the same time this was happening a few of my friends took jobs at Apple and guess what? They were offered packages that basically meant they would make as much as I did in 5 years if I were to get the million. So, where was my upside? I'm taking on all this risk just to break even with what I could make working at Apple best case.
The job market is crazy right now and it stands to get a lot crazier.
And don't even talk to me about "$100,000 isn't that much in the Bay Area". Even in the Bay Area software engineers easily make double the median household income.
I've never earned $100k in the Bay Area, but I can tell you that I had to pay $1100 to rent a single room in a shared house for a month, and that was getting a good deal compared to what I saw on Craigslist and Padmapper.
Yes, that level of real-estate cost does discourage my taking a job in the Bay Area.
At $100k you can spend 30% of your monthly gross income to pay a rent of $2500/month, which will just about get you a one or two bedroom apartment depending on how fashionable a neighborhood you want to live in or what distance to work you're willing to commute. That is lunacy. Consider that most people don't even make that much, not even in the Bay Area, and that the people who are capable of making $100k could get a much nicer life for it elsewhere.
For instance, if I could live in a decently cheap area while earning $100k/year, I would be able to save up enough to retire early after a while.
If you can keep your top people from being poached by your peers, you reduce the number of opportunities for them to leave (even if they would leave for much the same salary) and reduce your team churn, increasing productivity.
Increased productivity => MOAR PROFITZ, or so I've been told ...
Not sure why everybody and their mom is mad about something that affected a handful of top engineers five years ago. Slow news day?
It's standard practice in HR to calibrate salaries based on what other companies are doing. Some large companies end up being benchmarks for entire categories or regions.
If top engineer salaries at one company are suppressed, then so are junior engineer salaries. If that company's salaries are artificially low, then any company that uses that as a benchmark will duplicate those low salaries.
A junior engineer adopting "Steve Jobs is keeping me down" as his personal narrative probably has problems other than the games Silicon Valley billionaires play with each other.