

Big companies collude to hold down pay. - rmk
http://online.wsj.com/article/SB10001424052748703440604575496182527552678.html?mod=WSJ_hps_LEFTWhatsNews

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anigbrowl
_The companies have argued to the government that there's nothing
anticompetitive about the no-poaching agreements. 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.

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.

~~~
scott_s
_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._

I can't reconcile those two clauses.

~~~
anigbrowl
Oh, sorry! I meant that some people are innovating, but that the overall trend
has been towards sameness and value extraction. Many superficially novel
offerings are only stylistically different.

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.

~~~
SkyMarshal
_"Adaptive structural decomposition."_

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?

<http://portal.acm.org/citation.cfm?id=1458841>

~~~
anigbrowl
No, though it's that sort of thing. I came up with the term because it seemed
to describe the key process at work in future software - at least, the kind
which I expect/hope to see - and which depends on a sort of weak AI.

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.

------
hugh3
Companies colluding to drive down pay is, of course, the mirror image of
unions, which have employees colluding to drive up pay.

~~~
yummyfajitas
It would be interesting to see how many union supporters also support
monopsony agreements between corporations.

~~~
hugh3
I've found you don't generally get far with people by pointing out that their
political principles are horrendously inconsistent.

In fact, it's only a tiny minority of people who _care_ whether their
political principles are consistent or not.

------
Dove
It would be interesting to see companies genuinely compete for talented
developers. I don't think the guys that are 10x as productive would be making
20% more anymore.

~~~
mahmud
I know someone who is 10x more productive than his entire team, I worked in a
next-door department and watched the beast do his magic. Truth be told, no one
liked him. We couldn't keep up with him, all our bug reports would be several
releases too old. We couldn't get him to install an IM client, he doesn't
carry a phone, his email response rate is ~5%, several days too late, and only
responds to say he can't make it to social gatherings, etc.

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.

~~~
muhfuhkuh
That's what "solid B+" players are for: the rented lakehouse party, the
corporate kumbayas and sufficiently-buzzed Wednesdays at the bar across the
man-made pond in the drab, suburban office park. That's where A+ players go to
die. That's why even at mid-sized software companies, we didn't hire the A+
players because they make hiring managers and peers feel stupid and impotent.

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.

~~~
arethuza
On the recreational pharmaceuticals point...

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.

~~~
brlewis
I've never used illegal drugs, and I would be horrified myself at that kind of
request. I would see it as an indicator the VC company wanted a distrustful,
adversarial relationship.

~~~
arethuza
They didn't - I was joking about it :-)

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marknutter
So they'll all just end up with a less talented workforce in the long run,
leaving room for younger, more innovative, and generous companies to eat their
lunch.

~~~
okaramian
This would be great in theory, but however you cut it, it really sucks when
the most capitalized companies are all colluding with eachother to prevent the
market from working efficiently.

~~~
marknutter
It also sucks that the most capitalized companies are so big and powerful, but
that doesn't mean they're unassailable.

~~~
okaramian
I never said they were unassailable.

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?

------
awakeasleep
Wow. I personally read the companies argument as huge lie.

> 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.

------
patrickgzill
Does a human being have the right to contract with whomever he wants to sell
his labor to?

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.

~~~
_delirium
An interesting flip on the right-to-work laws. Those are usually targeted at
union-negotiated exclusivity provisions, e.g. if a company and a union sign an
agreement that the company will hire only members of that union, states with
"right-to-work" laws hold any such contracts unenforceable. It'd be
interesting if the principle were extended to ban _any_ contract that
interfered with the ability of two parties to come to terms, though. For
example, if I have a right-to-work as a programming employee, do I also have a
right-to-consult as a programming contractor, rendering any exclusivity
provisions standing in the way void?

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.).

~~~
btilly
The problem is that even if you made a contract between the colluding
companies unenforceable, the companies would be glad to collude anyways
because it is in their best interest to maintain the agreement.

------
donaldc
This is especially interesting in light of the recent stories about Google
offering huge raises and incentives to keep key employees from jumping to
Facebook. Good thing that Google and Facebook don't have a no-poaching
agreement.

But not so good that all these other companies had no poaching agreements.

------
known
Since Corporations have become bigger and smarter, Govt cannot monitor their
day-to-day illegal & immoral activities. It is better to breakup these
corporations into smaller entities to promote competition and solve
unemployment crisis

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Kliment
Is there a full list of the companies involved somewhere? I'm finding it hard
to find.

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prosa
Can anyone track down a non-paywalled story?

~~~
anigbrowl
Search for the headline on Google and click on the link from there instead of
here. At worst, registering will let you read a lot more stories for free;
they don't spambomb free registrations.

