
How Silicon Valley CEOs conspired to drive down tech engineer wages - uptown
http://pando.com/2014/01/23/the-techtopus-how-silicon-valleys-most-celebrated-ceos-conspired-to-drive-down-100000-tech-engineers-wages/
======
aspensmonster
Jobs' comments:

>OK, I’ll tell our recruiters they are free to approach any Adobe employee who
is not a Sr. Director or VP. Am I understanding your position correctly?

>if you [Brin] hire a single one of these people that means war.

Chizen's comment:

>if I tell Steve [Jobs] it’s open season (other than senior managers), he will
deliberately poach Adobe just to prove a point. Knowing Steve, he will go
after some of our top Mac talent…

Jobs sounds like a Grade-A Asshole, along with every other player involved in
this mess. Makes me even less likely to relocate to SV than I already was.
Though now I'm curious to know whether these wage-theft pacts extend beyond
SV, perhaps to Austin... Many of the same players have a significant presence
here. Seriously. If you've got info, hit me up.

~~~
zaidf
This is where he crosses the asshole line over to scumbag and crook territory.
I say this as someone who respects Jobs deeply for his product vision.

~~~
kirubakaran
He has always been there.

"Jobs told him that Atari gave them only $700 (instead of the offered $5,000),
and that Wozniak's share was thus $350. Wozniak did not learn about the actual
bonus until ten years later, but said that if Jobs had told him about it and
had said he needed the money, Wozniak would have given it to him."

[http://en.wikipedia.org/wiki/Steve_Wozniak](http://en.wikipedia.org/wiki/Steve_Wozniak)

~~~
31reasons
Woz is someone who is straight out of fairytales. I wish I had a friend like
him.

~~~
wozniacki
Wozniak on Jobs :

    
    
             *...told Jobs the good things these machines could  
             do for humanity, not the reverse. I begged Steve
             that we donate the first Apple I to a woman who 
             took computers into elementary schools but he made
             my buy it and donate it myself.*
    

[http://i.imgur.com/a1I9DTs.jpg](http://i.imgur.com/a1I9DTs.jpg)

[https://plus.google.com/+CarmsPerez/posts/GnVTvQNgvpf](https://plus.google.com/+CarmsPerez/posts/GnVTvQNgvpf)

~~~
johnmaddox
After all this why does Steve Wozniak stay with him.

~~~
wavefunction
Because he's the Woz, he's immutable and immovable like the Bhudda

Funny how Jobs was the 'Bhuddist.'

~~~
eric_h
buddha, buddhist

~~~
ape4
Jobs was a buddhist, but Woz is the buddha.

~~~
1stop
a buddha... the buddha died a long time ago.

~~~
chris_wot
Didn't he ascend to a higher plane?

------
firstOrder
The typical response I hear to the idea of more widespread labor unions or
AMA-like professional associations for programmers and
network/systems/storage/database administrators is that if someone is really
talented, they can negotiate a good salary, and that labor organizing together
would just protect the lazy and the slackers.

You hear this same thing when someone is lowballed a salary number, or has to
put up with some other annoying workplace condition, it's said the person
should negotiate this all up front with the employer, and that the person's
lawyer should get involved in the negotiation.

As if one person has any chance negotiating against a Fortune 500 company's HR
department, legal department etc. (or the equivalent forms coming from some
venture backed firm whose VC's lawyer's help with the HR legal forms).
Especially when the heads of tech companies are united (
[http://www.fwd.us](http://www.fwd.us) ) to trying to flood the Valley with
low-paid workers chained to the H1-B visa, driving down wages and shortening
the careers of programmers (
[http://heather.cs.ucdavis.edu/h1b.html](http://heather.cs.ucdavis.edu/h1b.html)
).

Now on top of that, we see that the companies are united in trying to drive
down wages. It's not just one Fortune 500 company doing this, it's the
management of all of them doing it together. Yet the idea of programmers and
admins organizing to defend their interests? Well only complainers do that.
Steve Jobs and Eric Schmidt organize for their collective interests, but any
tech who did that must have something wrong with him - he's a complainer,
lazy, whatever. We shouldn't be organized to have our interests defended.

It's a zero-sum issue with two potential beneficiary sides. There are those of
us who work, and create wealth being screwed by this. There are those on this
board who benefit from this exploitation and thus will pick at points in this
article, in this post and so on. Why wouldn't they, they're the ones who
parasitically benefit from this expropriation and exploitation.

~~~
spiderPig
As a H1-B myself, I think I'm pretty much a modern-day slave without the
physical shackles. I hate going back to my home country and I love the
intellectual, rational environment here. But I'm stuck with my current company
until I get a green card which isn't bound to happen in the foreseeable
future. I read his book on this and I agree with one of Matloff's points that
H1-B should be solely for talent and I also agree with the reforms he suggests
that there should be laws against exploiting them (ex: don't imprison them
with the whole green card ruse which could take 6-8 yrs for some countries).

However, I disagree with his generalization that H1-Bs are talentless compared
to Americans (Just look at Goog). And that somehow they're paid lower wages.
All big companies (MSFT, FB, GOOG) pay H1-B candidates the same salaries as
their American counterparts. And they all go through the same interview
process. Personally, I went to a top 20 uni here and paid $100k in tuition
alone. It is true that bringing more _talented_ H1-Bs will drive down wages,
but isn't that a competitive advantage ?(None of the European companies have
this advantage really and I think it's one of the main reasons for the
valley's growth.)

What we need to rectify is fraud of H1-Bs. Come up with a white list of
companies that can use H1-Bs and make sure there's no cheap, talent less
labor. Don't let body-shopping, consulting and outsourcing companies like
Infosys, Wipro be issued H1-Bs. Most people in the operations group running
our service for instance are on H1-B and frankly, the work they do can be done
by any average American working at a BK/McDonalds. The pie that outsourcing
companies are eating into is really a gold mine that should be used to expand
the American middle class. But the outsourcing companies themselves seem to
have powerful lobbying in place (NASSCOM). So it is a hard problem.

~~~
daemin
It's not that H1-B's get paid less than other workers, it is that by having
more people available to do the same job it decreases the pay for all people
doing said job. That's how the logic would appear to work, supply and demand,
etc.

~~~
lotu
The thing with and H1-B is if they lose their job they have to leave the
country the same day. That is a big incentive to work very hard and accept low
compensation.

~~~
daemin
Is it actually the same day? That would be quite harsh. E3 Visa holders get 2
weeks IIRC.

~~~
godzilla82
Yes, right, 2 weeks and that makes it so less harsh!

~~~
daemin
Indeed, some time is better than being on a plane that night.

------
msoad
Engineers should make more money than what they are making now. The largest
number I heard lately is $240k for a data scientist from Apple. That's too
low! That person can make Siri better and make millions for Apple.

Why aren't we getting paid like lawyers? If they win $20M they will get paid
at least $2M. But if we make a product that generates $20M profit, at best we
get $20K bonus. This has to change!

~~~
rohunati
Are you actually complaining about 240k? If that isn't myopia, idk what is.
Most people would kill for that salary.

~~~
scarmig
So what? Most people in the world would kill to make $30k a year.

The issue isn't the absolute level of compensation, but the relative split
between labor and management/capital. Exploitation is exploitation: a Roman
house slave, though better than the majority of slaves, is still exploited and
still a slave.

And why are you complaining about engineers wanting to get paid closer to the
value they provide the company? It's no skin off your back: sure, it might eat
into shareholder and upper management salaries, but they get paid in the
millions, which even more people would kill for.

~~~
sjg007
The adage is that those that risk capital reap the rewards..

~~~
scarmig
Adages only go so far. "A day's work for a day's pay." "To each what he
deserves."

Every economic function involves risk, to both labor and to capital. There's
no reason, however, that the majority of the value should go to capital. The
economics of relative scarcity, possibly. But that's not the situation here:
market forces didn't decide compensation packages and the return to capital,
here. Collusion did, which is a distortion of the market from a situation of
perfect competition.

------
pg
It seems like we should be able to measure whatever effect there was. There
must be sources of data about salaries in the Bay Area. Has anyone tried
looking to see if there is a depression in tech workers' salaries, relative to
people in other fields, during the time this agreement was in force?

~~~
cs702
I doubt we will ever be able to "measure" the effect. We can only guess and
debate it with hypothetical scenarios -- "what if all these CEOs had had to
compete for talented employees, instead of _fixing the market_ for them?"

Regardless of the effect, it is a shame to see that these leading CEOs, who
for years have vociferously complained about media & telecom oligopolies for
preventing competition, were for years simultaneously using _their_ oligopoly
to prevent competition for employees.

Apparently, they're all for free markets, except when it affects _their_
bottom line!

~~~
hashmap
What are you talking about? A "free market" encourages exactly this behavior!
If it weren't illegal it would go on indefinitely.

~~~
alanh
I think the parent meant that this collusion artificially denied what would
otherwise be a fair market _for the employees_. Of course, you are entirely
correct that this sort of thing is allowed if no regulation is placed on the
corporations.

~~~
raganwald
free market != fair market

------
acslater00
Yeah hate to spoil the party, but this is not 'wage theft'. Wage theft is very
specifically the act of withholding wages that an employee is entitled to
according to the terms of his or her employment agreement.

What happened here is not even 'price-fixing', it's a fairly weak attempt at
'collusion'. Yes, it seems improper at first blush and the email exchanges are
almost comically incriminating, but my guess is that it didn't really have a
substantial effect on the engineer salaries write large (or even executive
salaries). Agreeing not to cold-call employees is not the same thing as
refusing to hire them; that latter would have had a major depressing effect on
wages (kind of like if all MLB teams had a handshake agreement to never sign
another team's free agent) but that clearly isn't what happened here.

It seems to me like the proof is in the pudding. If big tech companies are
colluding to depress engineer wages, they're pretty obviously failing.

Anyway, I have no idea how this lawsuit will shake out, but I know that Pando
Daily is doing a shit-ass job of reporting, and I regret clicking on the link
and giving them the additional pageview.

~~~
rhizome
_it 's a fairly weak attempt at 'collusion'._

What form of success here qualifies as "weak?"

 _If big tech companies are colluding to depress engineer wages, they 're
pretty obviously failing._

You're going to have to show your work here.

~~~
rfnslyr
The fact that I'm a 21 year old drop out making nearly 100k because I sat in
my mom's basement for a few years and studied software that interested me is
pretty crazy.

~~~
wpietri
This is true, but irrelevant.

Market price is market price. These companies are generating massive income.
They are paying high wages (and colluding to avoid paying higher ones) because
engineers are necessary to that.

The question you should ask during salary negotiations isn't, "Do I, based on
my own value judgments and moral code, deserve this much money?" It's: "Are
they paying me market price for my skills?"

If market price for your work is more money than you need or you believe you
deserve, then take it and give it to somebody you think does deserve it. I
promise you that if you let your employer keep the extra, they will not do
anything better than you will with it.

Take the money.

~~~
nerfhammer
> These companies are generating massive income.

Illustration:

[http://www.wolframalpha.com/input/?i=profit+per+employee+app...](http://www.wolframalpha.com/input/?i=profit+per+employee+apple+google+microsoft+facebook)

Remember this is net rev, what they take in _after_ paying everyone. Assuming
the average employee makes $120K, and given that they can't exist long enough
to make $1 without the engineers showing up, these companies should be willing
to pay everyone up to 2-3x that

~~~
judk
Wtf, wolfram alpha doesn't know how to display units properly?

Anyway, considering that employees also have equity, those numbers aren't
obviously damning.

Nor are they particularly relevant, as "willing to pay" isn't the same as
"market price"

~~~
nerfhammer
> "willing[ness] to pay" isn't the same as "market price"

It _should_ be the same if aggregate engineer negotiation for compensation was
efficient

either that or there's a glut of engineers on the market, which would seem to
be the opposite of what we're always hearing

------
wouldprefernot
I'm curious. Are the executives who make these illegal agreements to restrain
trade ever personally held liable?

It seems that would be more effective than fining the companies, or the usual
"We don't admit to doing anything wrong, but here's some money anyways."

Apologies for the green account, but I would prefer not to have my real name
attached to such a discussion.

~~~
raganwald
And therein lies the problem. Although these companies are being prosecuted,
nobody wants to run afoul of them or anybody else. I'm not saying that any one
individual or company is presently a bullying wrongdoer, but what I am saying
is that there is an _culture of fear_ around speaking out or rubbing people
the wrong way.

This atmosphere--along with the kind of proprietary shenanigans that make it
difficult or impossible to truly own your own hardware and software stack--is
the very opposite of the hacker ethos that created much of the value these
barons robbed from the economy.

~~~
leoc
Note that of the fairly sizable group of high-profile, well-informed SV people
who frequent this site, you never see one of them comment on a post related to
this scandal.

~~~
sounds
I assume you're aware of who raganwald is, the person you're replying to? Not
technically Silicon Valley, but close enough.

I've deliberately kept my account "low-profile" for exactly this reason.

I'm in SV and frequently rub shoulders with these people. Trust me, they're
not ignorant. They've picked a side already.

But it's so much easier to play hardball with a new hire who doesn't know
anything; thus this kind of thing is "ignored."

~~~
leoc
Yes, I know a fair bit about who raganwald is; I was thinking of the guys who
are even more prominent and more SV-centred than him. All due respect to
raganwald's willingness to stick his head above the parapet on sensitive
topics like this, though.

> But it's so much easier to play hardball with a new hire who doesn't know
> anything; thus this kind of thing is "ignored."

I don't know about that though: if I was, say for instance, in a line of
business which benefited from skilled developers going into startups rather
than established tech companies this kind of news would look like the perfect
advertising to me—but I'd still want to keep my head down while it was being
discussed.

~~~
sounds
It looks like pg chimed in after all.

------
dasil003
As a programmer sure this annoys me, but I find it a bit disingenuous to tie
it to growing societal inequality. Tech workers are definitely on the
beneficiary side of the inequality gap, so I don't see how these conspiracies
to indirectly keep tech workers salaries down to _2x to 5x_ of median American
household income is really germane.

~~~
ryandrake
I strongly disagree that the average tech worker is on the "beneficiary side"
of the inequality gap. This is a case of people looking around themselves and
seeing they seem to be above average, and concluding that they are on the rich
side. Reminds me of a ten-year-old article [1] that presented the remarkable
finding that 39% of Americans believe they are or will one day be among the
top 1%.

It's certainly in the interests of those REALLY on the right side of the gap
to have tech workers believe they are on their side.

[1]: [http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-
hop...](http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-
self-interest.html)

~~~
wonderzombie
There's that possibly-apocryphal quote about socialism in the US never having
taken hold because Americans all believe themselves to be temporarily
embarrassed millionaires.

~~~
morgante
I definitely buy that software developers have a huge veil of ignorance[1].

We accept lower salaries today because we assume that one day we might be in
the ownership class. But this is somewhat reasonable, at least vs other forms
of labor. (A line cook will never end up as a millionaire, but a developer
might by either founding a startup or getting options on the right one.)

1:
[http://en.wikipedia.org/wiki/Veil_of_ignorance](http://en.wikipedia.org/wiki/Veil_of_ignorance)

------
sbisker
Now that this is exposed and (presumably) not as present, has anyone done any
work to see if salaries at Apple, Google, etc have since risen higher than
salaries at companies who weren't involved with such activity?

This sort of shenanigans went on 100 years ago, but we couldn't study the
consequences so tightly back then...it seems that Glassdoor's data, H1B data,
etc provides a unique opportunity to study the effectiveness (or lack thereof)
of such federal intervention.

~~~
nostrademons
Anecdotally salaries at the major tech companies just shot up in early 2011,
which was soon after the DOJ started its investigation. It's hard to infer
causation though, as this could have been because of rising competition from
Facebook for employees, or it could have been because of the large amount of
seed capital sloshing around in the startup world then, or it could have been
because of the Fed's easy-money policies.

Connecting this to current events, this was also the start of SF's rent-and-
eviction crisis. 2011 was when new grads started getting 6-figure salaries to
work in tech, and experienced senior engineers started getting up to
$250K/year in total comp. Turns out that when a large number of workers start
getting big salaries in a region where the housing supply is basically fixed,
much of that money goes into rent.

~~~
aliston
Facebook was the company that broke the cabal based on everything I've heard
from friends at these companies. I think it actually started a little before
2011, more like the end of 2009, early 2010. Facebook was (obviously) not
averse to poaching employees of other companies, and was particularly good at
hiring ex-Googlers by offering large stock grants and relatively high salaries
(~150k + 100k+ in options) for someone with 2-3 years of experience out of
school. Google made some jaw dropping counteroffers to those who left and gave
everyone a large raise and bonus at the end of 2010 as a result of the
increased competition.

~~~
hkmurakami
I wonder how much things have increased beyond the initial 10% pay bump in
2010: [http://blogs.wsj.com/law/2010/11/10/on-googles-10-percent-
pa...](http://blogs.wsj.com/law/2010/11/10/on-googles-10-percent-pay-hike-and-
antitrust-law/)

------
dredmorbius
One thing that strikes me as curious is why none of the companies involved
broke the story at the time or reported the situation to the Feds. I can think
of numerous reasons why, none of them particularly reassuring:

⚫ They all thought they could get away with it. The idea that there were no
defectors on this basis makes me question the integrity of the entire tech
industry leadership.

⚫ Nobody had faith in the DoJ's ability to to investigate, or a court's
ability to place injuctions, on this behavior and/or retaliatory actions.

⚫ Everyone had dirt on everyone else, at least in iteration. It was an n-way
Mexican Standoff. Every player felt at least one other had the drop on them.
[http://fixyt.com/watch?v=HzF_TbmDH5s](http://fixyt.com/watch?v=HzF_TbmDH5s)
[http://www.urbandictionary.com/define.php?term=Mexican%20sta...](http://www.urbandictionary.com/define.php?term=Mexican%20standoff)
As with the first instance, this does little for establishing trust with the
industry.

⚫ The threat of encroaching action was too great. Any defector would be
destroyed before the practice could be halted. There's one slim glimmer of
hope here: It suggests that the threat of union action would be similarly
disruptive and that a concerted action on the part of employees would in fact
tend to succeed. The Achilles heel of the tech industry is that its capital
walks out the door every night. If it realizes it can not come back, or merely
threaten to not come back, it will have gained a great deal of leverage.

⚫ They simply didn't care. Arrogance, psychopathy, delusion. It doesn't
particularly matter. Again, trust and reassurance are not promoted.

------
gress
It may be that the consequences of the 'conspiracy' was to depress wages, and
it should clearly be prosecuted if the legal case can be made.

However does anyone think that this was the _intention_ behind these
agreements? Isn't it more likely that they wanted to stop an insane war on one
another's businesses by buying off key employees to disrupt one another's
operations? It would seem as though companies with a giant stockpile of cash -
I.e. MS, Google, and Apple, could stifle competitors by just taking out key
employees of their opponents with large signing bonuses, regardless of whether
they intend to put them to work or not. The result would be a destruction of
value.

~~~
bps4484
The solution here is the same as the solution when Zuckerberg complained about
employees leaving their jobs too quickly[1]: Pay your employees more. Figure
out what kind of value they bring, and the amount of cost if they were to
leave, and adjust their wages accordingly. Make no mistake about it, the
ultimate goal of stifling competition is to depress wages. While maybe
described as "disrupting operation", it is really just allowing a company to
not pay an employee what they are worth.

Analogously, if 2 companies sold widgets, one in state A and one in state B,
and they each had a near monopoly in each state, if they each made a closed
door agreement not to enter into each others' states so they could each
maintain their near monopoly, I think people, and courts, would certainly cry
foul. Certainly competing would disrupt each others' operations, but the
competition would bring better products and better prices to both states, and
that's the point.

[1] [http://techcrunch.com/2011/10/30/facebooks-zuckerberg-if-
i-w...](http://techcrunch.com/2011/10/30/facebooks-zuckerberg-if-i-were-
starting-a-company-now-i-would-have-stayed-in-boston/)

~~~
gress
You missed my point. The cost of losing a particular employee at a particular
point in time can be far greater than the individual contribution they will
ever make. That cost is transient because it depends on the state of a
particular project. The value of the employee becomes the value of disrupting
the project to the competitor. Matching the offer would be an option, but it
would cause massive distortion within the company since the retained employee
wouldn't be contributing that much more than their colleagues.

I don't see any justification for your statement that better products would
result from this.

~~~
mrgriscom
That is the nature of at-will employment.

~~~
gress
What point are you making?

~~~
mrgriscom
My point is that if the employee has no guarantee of continued employment over
the period where the company still benefits from the IP that employee created,
why should the company have any right/expectation to the employee's continued
employment during a period that is critical for the company? Employees can and
should be expected to leave at any time in the absence of a contract to the
contrary.

------
OldSchool
Steve Jobs said it well, "this means war." The engineering profession as a
whole needs to play "war" like adults. This is going to cost money like
anything. A permanent PR company that at least gets the engineering profession
a louder voice than Marissa Mayer would be a start. A permanent lobbying
budget to slowly but continually chip away at domestic and international
threats to the buying power of your talent with changes in law is the other
half of how grown ups play "war." No need to act like laborers and form a
union or have strikes. Real change today happens via PR and lobbying. A well-
funded and run professional organization formed with this as its sole agenda
would do wonders for all of us.

------
PythonicAlpha
Somebody already complained, that the wage possibilities of software engineers
are limited.

I would take it further: In all industry, the trend goes one way: The wages of
working people (including white-collar, I hope, that is the right word) have
to go down, and the earnings from investments (pure money makes money
business) have to climb.

There are only very few exceptions: One are lawyers, as mentioned in an other
thread, and the other are people that work in the investment business
(investment bankers, traders, ...). The reason for the second exception is
obvious: their work is needed to make even more money from the money and every
trick is played, to have the smartest, best guys getting the job done ... and
get it done better and better.

Problem is: The whole thing breaks our society. Middle classes are already
melting massively in many countries. The possessions of the worlds are
concentrating in the hands of very few people more and more. Those people make
our laws! The other people become poorer, even in the situation that the
overall worlds possessions expand massively. The countries are already so much
in dept, that many of them can not pay even the interest. Even the US is so
much in dept, that there seems to be no possibility to get ever rid of it.

Nobody seems to realize, that while we are talking, investment companies are
roaming the world for land, for houses, for companies to buy them, exploit
them and throw it away when not needed (and not useful) any more. The wealth
of the world gets accumulated in the hand of investment companies and the
super-rich.

By rising the value of pure money investments, the value of human labor (to a
more and more extend even high-paid and high-value labor) is degrading.

------
staunch
Something that I think gets forgotten in tech salary discussions is inflation.
Consider that a $122k salary in 2001 would be $160k/yr in 2013, adjusted for
inflation.

------
rll
I was at Yahoo during the years in question and must have been approached 50+
times by Google recruiters. I wonder if Yahoo refused to play along or perhaps
they were never invited.

~~~
frandroid
What made you stay?

------
scrabble
_Google’s “People Ops” department kept overall compensation essentially
equitable by making sure that lower-paid employees who performed well got
higher salary increases than higher-paid employees who also performed well._

Serious question, is this generally considered a bad thing? Every company I've
worked for has had salary bands that work like this. They don't make it a
secret. Generally you know which band you're in and the range of that band.
I've recently been told in a company meeting at my current workplace that they
are mainly working to bring people to the middle of their bands. So if you're
above the middle, expect a low raise.

On the other side, I can't help but feel underpaid since I've been told by
people who know that the work I've done personally has allowed us to bring in
more than 100 times my salary in recurring revenue.

~~~
codeonfire
Salary is unimportant. Its like allowance from your parents. "Here's a little
cash so you don't starve or freeze during wage slavery" It does not matter if
its $50k or $102.5k, the goal is going to be the same for me.

------
d23
> These secret conversations and agreements between some of the biggest names
> in Silicon Valley were first exposed in a Department of Justice antitrust
> investigation launched by the Obama Administration in 2010.

Why is it that lines like this never quite make it into the comments section
here?

------
pja
Ah yes, "Don't be evil": illegally colluding to line your own pockets at the
expense of your employees is clearly perfectly acceptable behaviour as far as
Google execs are concerned however.

Makes you wonder in what other ways Google has "not been evil" doesn't it.

------
hoboerectus
Maybe it goes back further than that - maybe in the late '80s lobby Congress
to get the "Immigration Reform and Control Act of 1990" \- a.k.a. the H-1B -
to get some cheap immigrant headcount up, then maybe come up with the Java
programming language to get a simplified base point where they would be at
equal state, or something like that, maybe ship some of them back home to
train more, and then recurse. Maybe. Maybe people other than engineers do
engineering.

------
zgm
As a new grad about to enter the workforce, I find this more than a little
disconcerting. Do any experienced engineers have any advice on how to avoid
this kind of mistreatment?

~~~
josho
Know your market value. You can find this out by doing occasional job
interviews and receiving offers. Don't view this as wasting your time or
theirs, if a truly exceptional offer is made you would take it, and you often
don't know if they are exceptional until late in the process. (e.g. my second
job out of school nearly didn't happen because after the second interview I
thought the role wasn't interesting, fortunately the hiring manager persisted
and found a role in the company that I enjoyed, I stayed at that company for 5
successful years)

Learn how to negotiate, use those job offers from above to practice countering
on an offer. Realize that raises are negotiations too, and in negotiations
before the raise comes you need to prepare your boss properly. E.g.
Weeks/months before raise season remind your boss about your accomplishments.
Remind your boss about your accomplishments, it's not bragging if you do it
right.

Finally, just as you manage your career by learning technical skills you need
to manage your career by learning soft skills, and other career advancing
techniques. I wish I had books to recommend, but my lessons were all learned
through mistakes.

~~~
zgm
Thanks, josho! I appreciate the concrete, actionable advice.

------
laichzeit0
I don't really feel sorry for the employees. There's this fascination between
geeks to work at one of these "prestigious" companies, Google, Microsoft,
Apple, etc. yet at the end of they day you are burning all your time, effort,
essentially your life, to make a few guys rich.

They pay you enough to keep you happy, give you a few "interesting" problems
to work on if you're lucky, maybe a couple of perks at the office. Why are you
selling your soul to these guys in the first place? I just don't get why you'd
be interested in making someone else rich for some geek-cred.

~~~
cdeonier
That's pretty pessimistic. Sometimes there actually are interesting problems
at those companies. Larger companies can also offer benefits that aren't
available at some other companies-- sometimes security, sometimes work-life
balance, greater access to resources or talented people. Not everyone's
tradeoffs will be the same when evaluating where to work or what to do.

And in the end, pretty much everyone is working for someone to "make a few
guys rich". Unless you're a completely self-funded founder or investor.

------
quesera
The article claims that a "no-poach" agreement constitutes "wage theft". I
lost count at how many times that phrase was used in the article, but it was
probably fifteen times. It's completely incorrect, dishonest, and overdramatic
to the point of being insulting.

I accuse pandodaily of brain theft.

HN needs a kill file, I have truly never read an intelligent article from
them.

~~~
wpietri
I get why you are upset about that, in that it's a term of art that is being
misused. But given that the goal was to keep wages lower so that companies
could pocket the money, it's not an unreasonable way to describe it casually.

------
talmand
What astounds me by all this is the idea that the HR people in all these
companies seemed to have no issues with going along with these highly illegal
schemes. Must make for an interesting work environment to know that your HR
people were willing to screw you over for little or no personal gain.

~~~
wutbrodo
There's a couple of examples of them getting fired for not going along with
it. I don't think "following instructions so as to keep your job" is as bad as
"willing to screw you over".

~~~
talmand
If you are threatened with firing or fired for not going along with an illegal
activity I would think the proper thing to do would be to report the illegal
activity. If the law was structured in a slightly different way they could
have been dragged into the court case for going along with the scheme.

------
trysomething
This conduct is obviously despicable, though certainly not out-of-character
for Steve Jobs (all due respect for his talents). However, I generally believe
this will resolve (and has been resolving) itself via market mechanisms. The
mistaken assumption is that the only competition here is between Apple, Google
etc and that it is focused primarily on income.

The market is a lot more subtle than that:

    
    
      1. Hackers are not simply mercenaries, esp. the best. 
      2. A decent % of the best are involved in startups, either as  founders or early hires. 
      3. "Acquihires" are a mechanism for the best engineers to get paid more "outside" the system. 
      4. Aside from industry, there is competition from academia etc.

~~~
sounds
Your points are well thought out, but I'd like to play devil's advocate to get
you to expand on them, if I may...

1\. Isn't this why large companies target the inexperienced, the recent
college grad who is scrambling to make rent, or exploit people who can only
live and work in the US if they get that job?

2\. Some would say once you're a successful startup founder, you're "one of
them" and the incentives become reversed. Do you think hackers who become
founders still retain the hacker ethos? Why?

3\. Because acquihires aren't fully disclosed, wouldn't the market function
more efficiently if the compensation came through more normal means (salary
and stock grants)?

4\. Do you really feel like an academic path has competitive compensation to
industry?

~~~
trysomething
1\. Absolutely, they do target these people, particularly through internships
which are essentially recruiting tools. The BigCo advantage is that any decent
salary will seem like a lot to people who've never had one before.

However, they are not the only players in the game, particularly recently.
Y-Combinator itself started as a recognition of this paradox: while recent
grads may be "struggling" to make rent (and in need of income), they are _good
at struggling_ (scrappy, risk-tolerant etc) and therefore ideally suited to
starting a startup.

That said, I believe this particular lawsuit is more relevant to "proven"
talent than students.

2\. I think "hackers" will generally retain the "hacker" ethos, which I don't
think is particularly _tied_ to how they behave as founders or executives. I
don't see "hackers" as any more or less benevolent or idealistic than the
general population in the long run. In the short run, however, they are more
likely to feel empathy since they were in the same shoes as their early
employees more recently. From a more pragmatic standpoint, they realize more
acutely that it will take a lot to get the best people to stay and contribute
to _someone else 's_ dream.

Finally until they are formidable enough to engage in strategic discourse with
the likes of Google and Apple, they don't have the ability to attempt such
collusion.

3\. Perhaps, but not necessarily. Acquihires might be a particularly good tool
for talent discovery. There's also the _potential threat_ that acquihires
represent (if you treat us (engineers) too badly we'll just leave and you will
have to buy us back 10x).

Your argument here is a good one, acquihires may reduce information available
to all parties. However, this information asymmetry may work against the
acquirer more than the acquired (or vice versa). I don't think there is enough
data to confirm either possibility.

4\. It depends on what you mean by compensation. In many cases (not all), the
work may be more interesting and more importantly you (may) have more freedom
in choosing what to work on. I qualify these statements because to get all the
way to this utopia you need to get tenure, which is hard.

Regardless, you get to work with the best and most interesting people, which
is a form of compensation. Also, plenty of startups come out of academia
simply because it's like an extension of student life* (particularly grad
students, post-docs and other non-tenured people).

* discussed in #1

------
warble
This seems like it takes some basic facts and then jumps to a lot of
conclusions without any data (like sbisker mentions) - I'm not suggesting it's
BS, but it's not clear their obvious conclusions are so obvious. I'd love to
see actual wage data.

~~~
talmand
What could the wage data show you? That everyone in all these companies were
being paid much the same for similar positions? Doesn't seem like that would
prove much of anything.

You would have to somehow compare data from these companies with companies
outside the group. But even then, I'm willing to bet it would show little
because these companies were the big guns in the area. Very few companies
would be able to outbid them in wages in the first place.

Wage data is probably not really needed here. From what I understand of the
law, the mere fact that they had the agreement was illegal. Meaning they
didn't even have to implement the agreement, just that they made it. That they
seemed to have implemented it and attempted to hide it only adds to their
problems.

------
deepGem
So what if Google/Apple/Intel and everyone under the sun poached each other's
talent. How high can the salaries go and how high can the money drain affect.
After a certain number of years, things are bound to normalise isn't it ? Why
fret over 5 - 10 billion when all of these companies put together have
something like $500 billion collectively in cash. I seriously do not get this.

------
joyeuse6701
I wonder: could the recruiters that were fired sue based on wrongful
termination?

------
abalone
I think I've read anecdotal stories about companies like google paying huge
sums to hold onto engineers, like 6 and 7 figures. Does anyone know what I'm
talking about and is this a result of recruitment pressure by startups.. Who
obviously don't have the same agreements in place?

If so that would seem to support what the plaintiffs are saying.

------
smoyer
I don't agree that these agreements are ethical, but can someone explain how
they're different from the way a professional sports team manages the rules
for players transitioning from team to team? Perhaps the leagues should have
more oversight too?

Note that this completely ignores the NFL's non-profit status ... why was that
ever granted?

~~~
maxerickson
NFL players are all members of a union and collectively negotiate those rules.

(I doubt the league especially factors into the terms of the contracts between
teams and players, but the non-profit status is probably granted because the
team owners extract profits and the league just keeps the wheels turning,
there isn't an owner that makes money on the league itself)

------
dfraser992
All of the excuses and rationalizations I see posted here make me ill. It's
like very few "peons" understand the mentality of those who are "in charge" \-
e.g. the Clueless, Loser, Sociopath hierarchy of how businesses are
structured. There has been a recent spate of stories across the web about how
wealth affects people's mentality and behavior - I am reminded now of a story
about India and how the stark class differences there motivate those at the
upper end to treat those not in their own class as even human.... it is more
subtle, but just as bad here in the UK. Why would it be any different in the
West? How in the world is Silicon Valley, or IT in general, any much different
than any other business sector? It is a fundamental characteristic of
capitalism that capital will try to exploit labor as much as possible and by
any means available. Engineers getting $250K a year is irrelevant - those
people are still just "house niggers"...

As a middle class American, admittedly clueless, the education I've gotten
over the past decade has been eye opening. And a bit late; I wish I'd learned
this stuff years ago. But that is the dark side of being an engineer - the
work and the creative aspects can swamp everything else. Other creative
professions have this same basic problem, with the business major types
exploiting them as much as possible. And basic Marxist theory is even more
forbidden than rational thought about drugs in America...

i am not a raving Marxist, but after the last 4 years of my life getting
shafted by one of the new crop of robber barons (an out and out sociopath)
(yes, I have finally graduated from the Loser class (or been expelled))
it's... christ. Humanity is so tiresome. I've had some great bosses, mind you,
and worked for some good companies. But the capital-labor relationship is
fundamentally deteriorating and with the coming rise of automation and
increased population and refusal to raise taxes and all these other social
forces I see, the future looks very dystopian over the next 20 years. Things
are getting such that the only logical position to take is that you
incorporate yourself and thus you can act as sociopathic as you need to, given
everyone else is acting the same. Does anyone with any sense want to live in
such a world? I'd like to just do a good day's work, get paid fairly for it
and not have to spend more time figuring out how to protect myself from
getting screwed over - or figuring out how to screw over the next guy. I can't
do my best possible work otherwise. I've got better things to do than play
social games. This is something Ayn Rand touched upon in Altas Shrugged, as
reviled as that book might be. Lots of capitalists these days are nothing but
the social leeches that she railed against, despite their hypocritical
protests to the contrary.

I guess I am a Marxist, or at least see the slice of truth about life and
society that it reveals. There is a value in honest work, in creating
something useful for society - that is something fundamental to being a real
engineer. IT likes to claim that is a fundamental value of the profession, but
I don't see that anymore (in general). There is too much money sloshing
around. Things are getting out of balance. I can only hope the social strife
prevalent in the 30s (go read some American history) comes about again - OWS
and the protests in the Bay Area now are only the beginning. Then again, the
resurgence of the fundamental social forces motivating the 60s that happened
in the very early days of the rave scene got explicitly squashed by the
authoritarian parts of the power structures in society.... Yes, I do have some
stories.

Fortunately, climate change will smack humanity upside the head and force us
to start thinking differently.

~~~
dnautics
Do you want to know what marxism is like in america? Try academic research
science. Pay lines for postdocs are effectively set by a centalized agency -
NIH guidelines. There's limited market and a captive, oversupplied labor pool,
zero ownership of the means of production ("it all goes for the collective
effort"). Advancement is not meritocratic, but rather a combination of being
in the right place when a position opens up, and who you know ("political
connections"). As a result you have absurdities like me: a PhD four years out
of grad school (10 years off my bachelor's) that can run circles around bosses
both intellectually and technically, experience in multidisciplinary research
up the wazoo - making $40k/year. Meanwhile, the head of the institute built a
$37 million vanity building, excuse me, lab facility, and does media gigs
showing off his tesla roadster to David Frost - largely extracted off of state
funds by skimming off of grants ("overhead") and also state-provided "R&D and
investment vehicles" \- SBIRs, etc.

Well, at least I'm not an H-1B. I remember a postdoc on an H-1B who lived in a
one bedroom underneath me and my roommate's from grad school, who was paying
twice I was in rent and also trying to support a wife and two kids on an
equivalent salary in this relatively expensive city (San Diego).

Enjoy your marxism.

I have left the system - I'm starting up my own biomedical/science research
institute run off of actually humane principles - and so I'm, in the interim,
unemployed. Luckily, I seem have some skill in the "free market" and so I'm
financing this short break in employment off of investments I made (bitcoin, a
handful of stocks) and am entering in 'hustle' mode - picking up whatever jobs
I can to tide me over (you don't get unemployment benefits if you quit, even
though you've paid into it). I'm much happier. When I do work, I know that
what I'm doing is making a difference -if minor- in people's lives, not
working to advance the agenda of a faceless bureaucracy doling out grants
mostly administered by scientists who couldn't hack it in research and so went
to work for the bureaucracy (dunning-kruger effect).

~~~
Iftheshoefits
All I gathered from your comment is that you are a PhD holder who doesn't know
what "marxism" is.

~~~
dnautics
Presumptively the 'most important' things that Marx believed is the idea that
the workers should "control the means of production"[1] via a centrally
organized apparatus, preferably the state, plus theoretically orthogonal
(except to the keepers of the faith) stuff like labor theory of value,
distinction between productive and unproductive labor, and dialectic model for
social progression, plus a little bit of pining for the simplicity of the
feudalistic era.

But, you're right, I don't know what "Marxism" is. But, I suspect many self-
proclaimed marxists haven't even read Das Kapital or the Manifesto, so at
least I'm a little bit ahead.

[1] I will cop to not fully understanding what it generally means to 'control
the means of production' but I blame Marx. It's kind of not a really well-
defined idea, and he had a penchant for florid language, in places where he
was compensating for not being precise.

~~~
dfraser992
My post was a bit of a rant, admittedly. I am reading Das Kapital now and have
found it useful - I am an engineer, so yes, "central planning" is a
unrealistic ideal (how does the behavior or organization of the Federal
Reserve not fall under "central planning"?) But as a work of philosophy, the
ideas in Das Kapital are useful - labor theory of value, productive /
unproductive labor, etc. My first draft got long, so I'll try to keep this
short.

As for your situation, it to me seems more like the corrupt quasi-totalitarian
system involving oligarchs and Ayn Rand's "moochers" and etc - crony
capitalism? It doesn't sound anything marxist to me - the Soviet Union was not
communism, despite whatever they claimed. And America is hardly a democracy...
People are fundamentally corrupt, especially when there is money and power
involved.

Re: "control of the means of production" \- let me explain it this way. In
London, I got hired to build a website and somehow it turned into me being
employee-ish #1 (and the only one) for a B2B startup. In my contract (one for
contractors) was a clause about my ability to stop work and demand payment for
late invoices at any time. But IT startup culture is not really like that -
you get the job done, right? It is hard, and professionalism counts for
everything. So in my mind, it was the nuclear option - I need to use that,
then the relationship with my client has irrevocably broken down because step
2 is calling in the lawyers. But the CEO of this startup, who is a lazy,
shiftless, and sociopathic bastard, leveraged that work ethic to the point
where he was refusing to pay everyone's invoices (me and the salesguys) -
"cash flow problems". But we still kept working, to keep the company running.
While this bastard took skiing vacations - he and the other founder did very
little work, really. All they did was put up a bunch of cash and had an idea
and no skill what so ever relevant for the task, except how to exploit the
workers and scam the customers with badly written contracts.

It all came to a head when one customer threatened to sue - he'd been flat out
lied to about the nature of the data he was being sold. I fixed the situation
- I was the engineer - and then demanded payment. They point blank told me to
go fuck myself, deliberately breaching the contract.

This is when I realized I 'control the means of production' \- I was the
-only- person in this 5person company who could do anything useful of value. I
was the one generating all the value (the code, the systems). I was labor and
had been fucked over by capital, who brought nothing to the table except
money. They didn't even bring a work ethic. Well, the salesguys, but their
function was to take my output and get customers interested in it. All capital
did was think up ways to exploit both customers and workers. So I controlled
the means (because everything I did was the foundation of the company) and I
did not use that power to my benefit to counteract the predations of the evil
capitalist pig I was dealing with. I should have gone on strike; that's what
that clause in the contract was for. But middle class white collar Americans
don't have that mentality, and especially IT people. My introduction to the
real world utility of Marxist philosophy was a harsh one...

Fundamentally, my mistake was not realizing I was my own corporation, and not
an employee, and so had the responsibility of acting as sociopathic as need be
in order to deal with 'corporations' or people who are doing the same. I hate
doing that - it is not in my nature or mentality. I guess mentally, I am more
working class. I prefer to cooperate with people than exploit them and I would
guess this goes for most people in IT.

So what are you producing that other people higher up in the hierarchy are
appropriating for their own and exclusive benefit? It sounds like you have
decided to become capital yourself, which I encourage - today's ethos of
engineers starting their own companies is a good thing, one that really wasn't
happening when I started in IT. So hopefully the lazy capitalist pigs who do
nothing but exploit labor can be cut out of the equation eventually... But
don't exploit the people who work for you!

------
alooPotato
I remember reading that these pacts don't apply if an employee initiates
contact with another company.

Seems like that would be the best way to get salaries closer to market rates -
simply be proactive and always talk to other companies and get your company to
increase your salary to stay.

~~~
josho
You missed the part where salary ranges are shared, that before an offer is
made the current employer is made aware of what is about to happen, and
more... I suggest you read the article it is quite comprehensive the measures
taken to decrease pressure on rising wages.

------
cromwellian
Amazing how just a day ago, the media is carrying stories about wealthy
techies hurting poor people, driving up prices, living in lavish palaces, and
enjoying huge unfair perks like free shuttles to the office. Now the story is,
they should have had even more money.

------
cconroy
Does anyone know more about how the institutions which these men and women are
perched at the top of, affect there attitudes about workers and their labor? I
just can't understand what their motivations are, is it really just about
maximizing the bottom line? Do they look at workers as just machines, which
are fungible; instead of as human beings that are indispensable from their
individuality? Is the institution the sole cause of this, or are these
powerful positions in a electric field, only attracting particular forms of
matter (and repelling others), or a combination thereof?

~~~
gaius
At that level it's a game and money is the score.

------
wyclif
Mark Ames loves overusing the word "dreary" and its variants: three
consecutive times in as many short paragraphs. PandoDaily needs a copy editor
rather badly.

------
ABS
interesting that no one (of the CEOs involved or here in the comments) thought
about the natural thing to do when faced by an abuse: to report it.

That would be too much I guess :-)

------
rajesht
The site seems to be down, here is google cached copy
[http://webcache.googleusercontent.com/search?q=cache:s-e6m0J...](http://webcache.googleusercontent.com/search?q=cache:s-e6m0J17tAJ:pando.com/2014/01/23/the-
techtopus-how-silicon-valleys-most-celebrated-ceos-conspired-to-drive-
down-100000-tech-engineers-wages/+&cd=1&hl=en&ct=clnk&gl=us)

------
presspot
My personal experience is that the pay structure at Google has not depressed
wages at all. It's not unusual to encounter a mid-tier engineering lead
pulling down $650k+/yr (with stock), working 40 hours a week. Try hiring that
person away from Google. It's nearly impossible to match that kind of take-
home without turning your business completely upside down.

------
kv85s
I blame the spineless executives, who peed themselves and folded at the words
"this means war". WTF did that hippy salesman Jobs know about war? Oh, you'll
go and hurt someone's feelings at a meeting? Give me a F-ing break. That
shitbag Jobs wasn't fit to scrape the muck off a real veteran's boot.

------
AnneTheAgile
Since CA is one of the few states that bars non-competes, I doubt this lawsuit
could have been brought forth in any other state. Lawyers out there, am I
right? In NYC for example, the non-competes are draconian, and there is far
less movement between companies. In SiV, fortunately, movement is the norm.

------
bitL
Kids, this is why you should strive to become your own bosses and bootstrap
your own businesses!

------
bnolsen
defense contractors did the same to stop engineers from bouncing around as
well.

------
jfasi
Does anyone else find it amusing that the author is trying to put an "income
inequality" spin on an article about tech employees being forced to take low
to mid six figure salaries?

~~~
jazzyk
No, I don't find it amusing. I think you missed the point. What is being
discussed is _relative_compensation. Relative to additional revenue generated,
or relative to what other professionals (doctors/lawyers) make. Keep thinking
like a slave, you will be one for life.

------
nathanvanfleet
I'm not sure why no one is talking about Schmidt in regards to this article?
He is also a famous dick and even a sex creep. Neither of those two were known
as being a nice guy.

------
shawn-butler
Power-mad, short-sighted CEOs are par for the course. What is really sad is to
see are references to the extent that Board members not only were aware but
actually facilitated.

------
worldsoup
the leaders of Apple and Google are greedy crooks...they are just way better
at PR than most other corporate bigwigs

------
sarojt
I thought anti poaching pacts were legal, arent they?Big tech companies like
Facebook and Microsoft have them.

------
yuhong
I remember another thread suggesting that Eric Schmidt be fired for this.

------
lucasisola
And now they conspired to bring down the site that hosted this article...

------
cranklin
well, we can play that same game and form an engineers' union

------
known
Unlike Capitalism, Globalization is Zero-Sum.

------
wellboy
Isn't this good, because it kept the insane rents in Silicon Valley down a bit
at least?

------
brosco45
We lose.

------
michaelochurch
I am so glad this is being revealed now. It's not exactly new, but this is the
perfect time.

Why? Because Google Bus Protests, that's why. This is a chance for the people
and the engineers to line up, shoulder to shoulder, on the same side and take
down the fuckers who've become the elite of this system.

The resistance begins.

~~~
tsax
Er yeah. The 'people' i.e. astroturfed left-wing activists are protesting the
employees, not the CEOs.

~~~
wildgift
Please. I know activists like the Google bus protesters. I'd call them protest
enthusiasts, and usually less than half work for professional activist
outfits. Most have regular jobs and just love to protest.

The "astroturf" is fwd.us and peers.org are pure astroturf. You can't even get
a political position out of them until their lobbyists have written the
legislation and tried to insert it into some bill.

~~~
tsax
False dichotomy. Both are astroturf.

------
leterter
The war on the middle class! And they are winning.

------
pbreit
Every time I read an article about this I fell like I'm at The Onion. Drive
++down++ engineer wages? Really? Does anyone on planet earth feel like
engineer wages are/were artificially low?

~~~
beachstartup
YES.

based on anecdotal evidence, top engineer salaries start capping out at 150k,
when in reality this should go into the 300, 400, 500k range like lawyers and
finance people make.

it's already starting to turn, so i'm hopeful.

~~~
United857
At many companies, both startups and established, if you're a top performer
and/or joined early enough, stock grants can easily propel you into this range
(and beyond).

~~~
pyrrhotech
the figures he referenced are straight salary. A typical 30 year old
investment banker at top firms will make 400k salary, but could easily be over
7 figures with bonus. Startup equity is rarely, if ever, worth that much on a
risk-adjusted basis.

~~~
United857
Not just startups, but even big companies like Google and Facebook have seen
significant stock growth that have resulted in 2-3x compensation increases --
even if you joined post-IPO.

~~~
jazzyk
Ah, yes the "get rich through stock options" myth again. It is funny how
everyone uses Facebook and Google as examples not realizing that they are
pretty much unicorns. The truth is that 7 out 10 start-ups fail, and your
options will be close to (or completely) worthless. Even if your start-up does
well, are you really going to get rich with your 0.05% share of the company?
Except for VP Eng or CTO positions, it is rare that anyone in development gets
more than 0.5% of shares. Which are diluted at every round of subsequent VC
round.

