So Silicon Valley execs were illegally conspiring to drive down wages, and who knows how much more was done outside of the paper trail mentioned.
Then we have an article discussion yesterday and blog posts etc. in the past few weeks about how companies can't find great engineers, and how we need immigration law changes that blocks Mexicans etc. but brings in more engineers to drive down engineer wages etc.
Maybe if CEO's weren't illegally conspiring to drive wages below their market value, there wouldn't be a so-called "engineer shortage"?
I mean it's risible. They conspire illegally to drive down wages, then whine that not enough people want to work in this field where wages have been artificially and illegally deflated.
How does someone this stupid rise to such a high position of wealth and influence? Are we talking luck here, or are Faustian bargains involved? Where do I get some of that action?
I'm only being half-facetious; this is weapons grade stupid. "Let's take this conversation offline because we'll get sued or indicted if it gets out." Yeah, that will totally work in a grand jury room.
If low IQ isn't the explanation, and I don't see how it could be -- given the respect and reputation we all accord Eric Schmidt for his other achievements -- what is? Drugs? Mental illness? Distraction? Forgery? Did he fail a saving throw versus reality distortion on one of his walks on the beach with Jobs? What?
You can be sued over lots of things, whether or not they have merit, and keeping things verbal is one of the "standard" techniques of defending against that. In this case, were this the only document in the pile, Eric would be in a position to either not recall the conversation he had with Omid, or deny its content. Further he would argue that it is a general state of mind for a CEO that they don't want to create paper trails over anything that could be construed by a litigious opponent as evidence if misdeeds.
The problem in this case is that there is a bunch of other circumstantial evidence that makes it pretty clear that everyone on Google's EMG was on the same page with respect to this particular policy. I note however that Google has yet to settle in the class action, so they may still believe they can defend their position.
That said, the "valley" has always been a really small place with regard to hiring. If you work here for any length of time a tapestry of opinions about you will be formed and those opinions will affect to a larger or smaller degree who offers you work and who doesn't. Is that legal? I don't know. There are folks I have decided to never work with again, and people for whom I would change jobs in a heartbeat. Is my private 'blacklist' and 'whitelist' of good and bad co-workers legal? As a generic engineer? What about now that I'm a VP and perhaps these folks are trying to get a job at my company? Do you know how many people are sued each year because someone suspects (or knows) that they told a potential employer that they personally wouldn't hire them? My point is that people and employment and fuzzy criteria is a fertile ground for lawsuits, so paper trails are always bad.
That's all fine and dandy, but what is 'weapons grade stupid' is to not only have the conversation in email, but then to use a key word like 'paper trail' to lead any investigation straight to his conversation. And in that exact email, say WHY he wants it done in-person. I mean, 'paper trail' has to be up there with 'take this offline' and 'this is sooo illegal' for phrases that serve up incriminating evidence on a silver platter to the DOJ.
A non-WGS response would have been, "Come up to my office: we'll discuss further."
Reminds me of another industry-centered town in that part of the country. How do people feel about Silicon Valley becoming the next Hollywood?
I have friends who testified for Microsoft in the DOJ trial in the nineties. Schmidt testified for the DOJ and was well-aware of what happens with corporate email.
He might be smart, but he did a very stupid thing. Whether it amounts to a slip-up or hubris, time will tell.
I never had a feeling that he's a smart guy watching him talk (in contrast with Larry and Sergey and Zuck) and I generally despise his attention-whore attitude and kissing ass in political circles.
And everyone knows not to use lex.
A couple of times better than what? Being multi billionaires and leading one of the most powerful and most respected companies in the world?
Most experts agree that picking Erick Schmidt as CEO was instrumental to Google's success.
Brin seemed pretty complicit in it. He didn't make the final decision to appease Jobs, but he asked for a temporary stay in recruiting Apple employees and obviously agreed with Schmidt's decision to ban all recruiting.
I actually started another thread discussing this exact topic:
"If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."
The irony must be pretty painful.
> "People are treating Google like their most trusted friend. Should they be?"
> "I think judgment matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. But if you really need that kind of privacy, the reality is that search engines, including Google, do retain this information for some time. And it’s important, for example, that we are all subject in the United States to the Patriot Act. It is possible that information could be made available to the authorities."
Which, in light of the the legal lengths the federal government will go to get their hands on every bit of data--let alone the illegal lengths they'll go--is a pretty important warning.
But we didn't talk about that, because the internet and the media operates on sound bites. It mattered what Eric Schmidt may or may not have approved of (that statement literally takes no position either way), not the important point he made immediately afterwards. Not a lot of PGP and OTR discussions on the internet that day, just knee-jerk "oh the irony!" contentless posts.
About the new privacy policies, here's another interesting part from that same interview, which to my knowledge hasn't been transcribed anywhere:
But Eric Schmidt says protecting user privacy is Google's top priority.
- Where does all my search info go?
- Well first place our privacy policies are fully disclosed on our website and it's all written down very carefully. The most important thing we do is that after 18 months, the search information that you entered is so-called anonymized, it's literally gotten rid of and we can't go back and track it back to you.
(To be clear, I'm not blaming Eric Schmidt since he was no longer CEO. I just want to highlight the striking fact that his whole defence would fall apart.)
What is stupid exactly?
Saying "We should discuss this verbally so we don't risk to get sued" is not illegal. It's not even acknowledging doing something illegal. You could even argue in court that you are explicitly taking an action to not do something illegal.
You could argue that, but you'd have to be pretty deluded to think anyone would believe you.
It doesn't matter, courts need to prove you're guilty. My point was that this sentence in an email doesn't get the prosecution any closer to that goal.
True, but you don't have to be quite so helpful.
Maybe the fact that so few executives ever receive any negative feedback (jail, fines, firing, etc).
I think you thought to much into that line.
> Maybe if CEO's weren't illegally conspiring to drive wages below their market value, there wouldn't be a so-called "engineer shortage"?
What illegally driven-down wages mean is that the shortage is more acute that previously thought. That's because the main way to measure the relationship of supply and demand is through price; i.e. the more the salaries grow, the less supply there is relative to demand. So if salaries have been held down, some of that evidence was masked.
Secondly, it means that non-giant companies could be competitive in making job offers, whereas perhaps in a more free labor market they might not be able to compete salarywise with Google, Apple, Microsoft, etc. Thus, as seen from say, a startup's vantage point, this check on the upward price pressure actually kept the supply of affordable engineers up.
So I remain sympathetic to the there-aren't-enough-programmers line of thinking, and certainly don't think of this as hypocritical or antithetical to that line. Of course, that doesn't excuse any of Google's behavior here; they've effectively stolen a great deal of money from all of us through illegal collusion, pocketing the money that an honest market would direct into the engineers' bank accounts. I hope there's hell to pay.
Edit: I suppose it's theoretically possible that if the salaries went up to their natural levels, then people would pour into the field, and perhaps that's what you're trying to say. I think that's very unlikely, since software engineers are already paid a great deal more than most fields, so these people are either people who don't care about money unless it's a lot of money, or they're people who instead chose to be doctors and lawyers. I'm sure more people would say, "hmm, maybe I should be a programmer", but you have to ask why those people aren't doing it now. As economists might put it, this is a structural problem, not a market problem (I hope I'm using those terms right).
Not really, price ceilings have a well-known effect of causing shortages because purchasers who should have been priced out of the market use up some of the supply. If the price had been allowed to rise naturally, those willing to pay the higher price would get what they need.
Sure, you can find examples of people who went into other areas, but given the very low barriers to entry (put some good stuff on Github repeatably, no industry requirement for an advanced or even undergraduate degree if you have talent, no unions or guilds, no competency certifications required to practice software engineering), I don't think there's such a big pent-up supply.
I'm sure there are a lot more people like me.
Furthermore, it's not like quantity supplied is perfectly responsive to price. It takes time for new people to enter the industry.
Talking about the long-term is rather pointless because technically, from a theoretical standpoint, everything is supposed to equilibriate over the long term. All shortages self-correct over the long term. Again, this is theoretical.
It's not an option for them to re-train, they don't work that way.
1. Companies in the Google/Apple/MS cabal
2. Other companies
Companies in 2 can always just pay more for what they want, since they're not governed by the cap. If they did that, of course, they could pull a bunch of people away from 1 and the price level would keep rising. That didn't happen because (mostly) only companies in 1 are able to pay at near the cap level anyway. So there might be inefficient hoarding, but it's just companies in 1 hoarding from each other.
It doesn't analogize exactly to, say, anti-gouging price caps for gasoline in a snowstorm (which, I agree, lead to terrible shortages and inefficient allocations), because this is equivalent to the gas stations setting a price floor (people shop at places with the lowest prices but work for the place with the highest wages). And then some gas station down the street opens a gas station with prices lower than the floor...
> ... what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP
You can also see Microsoft in the screenshot of Google's "Do not call" list.
Said company would gladly go along since it benefits as well.
Neither Bill Gates nor Steve Jobs would get in the DOOR at a tech company today. They didn't finish college... Or the RIGHT college. Their own companies would buy their startup and boot them.
It's a culture of childishness that they have so much money and resources they don't have to value WISDOM that employees might bring. In fact they actively ROOT OUT those employees in their hiring processes.. That's why all the games.. They don't want employees that won't play. They have myopic NIH syndrome hard.
It helps a bit if you are filthy rich at the beginning.
Oh, I have a feeling they'd squeak by, somehow.
Actually, it just gave the non-engineers more leverage. If the engineering rates where higher, there would be more engineers who would be founders. Engineers would have a larger % of the startup, since non-cash compensation would have to be offered.
Also, the artificial deflation caused some engineers to be stuck in a bad job.
That's why I won't be anyone's employee. It's a bad deal for me. It's a bad deal for many engineers who are employees right now.
Unfortunately, it took me a while to learn the game. There's a business side to being an engineer. You don't learn that being an employee. It's against the interest of the management to have their employed engineers think that way.
No, it just means the sense of entitlement amongst tech CEOs is even greater than previously thought.
But if the salary was higher, there is a good chance that I would have worked at that job for longer than I did. So I think salary does affect labor supply, and the supply of engineering talent is not as inelastic as you may think.
Rules for wage negotiation for ordinary employees have generally much bigger impact.
Well then you are not reading it correctly. What does it say?
>> Google is the talk of the valley because we are driving salaries up across the board
Schmidt says as plain as day, in e-mails that escaped his admitted attempts to remove a paper trail, that this is about holding down wages. He says it as plain as you can say it.
I can read this, and the other HN readers can read this in black and white. That people like you feel the need to deny this happened when they have been caught red-handed says more about you then it does about what happened.
Yes, I read it very well. Schmidt indeed mentioned holding the wages down, BUT from the context it's clear they mean those who are targets of employee poaching. And that's certainly not everyone - quite the opposite, only exceptional individuals or strategy hires.
Hint: It doesn't go down.
Amazingly short-sited argument. It forces people to either accept a low paying job in a field they love, or find another field just to make ends meet.
The companies themselves have created the shortage they're complaining about.
When Harvard grads start choosing Google over Goldman Sachs, I'll believe in the engineering shortage. Now excuse me while I return to my 10 hour Craigslist odyssey to find an affordable Bay Area apartment...
I'm not even sure if finance beats CS pay for those in the top-tier, especially on a per-hour worked basis. It may be hard to track as so much comp in finance is bonus and so much in CS is equity.
It also means that the deflated salaries/compensation may have led to managers/business/finance decisions being all wrong - investing in some projects but not others and skeweing the technical landscape. Im thinking of things like GWT or dartlanguage, and the like, which if engineer prices would have been correct probably would not have been made at all.
The conspiring to lower compensation has hurt the field and profession of software engineering as a whole.
This shortage of "engineers" is another excuse to make government pay for education or take more immigrants and pay for them, their health care costs, language education etc, to make tax-payers pay for recruiting engineers to the tech giants.
I think the opposite. It is not in the best interest of "the product and output" for engineers to keep switching jobs every few months to get increasingly greater salaries for the same work. It creates incentives to not care about the product.
How many lawyers do you see switching jobs every few months?
Anyway software engineers shouldnt care about the product once the project is completed - the job to take care of the product is with devops or maintanence people. Development, and thats it.
It's all propaganda plastered with a nice marmalade of feel goody "let's help the immigrants", or "everything great about our country came from immigrants", or other such variants of rhetoric. It's actually very smart, because it plays to the tune that people dance to.
That said immigration policies do need to change, and immigration is indeed a good thing for this country. Attracting talent is a lot of what makes this country great, but we need to be careful with the fine print of such policies as to not destroy our own economy.
I want them to change too... but in a different way. I'd rather that we take the unwanted and wounded, the homosexuals threatened to receive capital punishment in Uganda, the atheists who worry for their lives in Saudia Arabia, the homeless in Mexico yearning for just a small improvement in the access of opportunity (no matter how small of a step it may be). Let the Indians keep their talented engineers -- let them improve India, god knows it's got enough problem of its own, don't send them to us here so they can make another silly app. Let China keep its engineers, so they may one day create technologies that truly challenge the great firewall.
Seriously, is it just me who sees this aggressive attempt of siphoning the world's talent as being opportunistic and predatorial? This is not the spirit of America that Emma envisioned, this isn't something to be proud of.
"Keep, ancient lands, your storied pomp!" cries she
With silent lips. "Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
I seriously, honestly doubt this.
Consider the main force behind FWD.us: Mark Zuckerberg.
You're telling me the most positive good for humanity to get out of talented people is at Facebook, where the most valuable people to the company are those who optimize advertisement algorithms that exploit cognitive biases of a population already being challenged in all sorts of horrendous ways?
I really don't think your perspective is getting things right. If the engineers want to make great apps for Android or iOS, they can make it sitting in India or China or Brazil or wherever.
Silicon Valley is definitely a place where talented people can find their own, and thrive.
Americans move there, to take part in the opportunities only available by meeting and visiting personally. Its a second-rate experience to try to do it from afar (this from a guy that is 2000 miles from SF), especially if you've never been there and have no contacts.
Aha! Eric Schmidt had to just write a clever email like this instead and he would be applauded instead of criticized. To Apple: We would rather that you keep your Engineers - god knows you've got enough problems with your services! We will keep ours in return!
I guess if the huddled and poor learn programming, get good at it and start working for less - that'd be the right time to send them home to fix problems in their homeland and look for other huddled and poor - lather, rinse, repeat and all of world's problem magically disappear. Hey "the other" people are malleable masses with no ideas/likes/visions of their own - we can do as we please with them. Oh and they all, being Engineers have absolutely magical powers to solve any problem you throw at them - Terrorism, poverty, energy, hunger - you name it and they will solve it no matter how much oppression and apathy and violence confronts them!
Yeah, you made it sound idealistic but it's hypocritical and has no chance of working. It isn't far fetched to say that if the Engineers in China/India saw a way to make great opportunities happen in their own homeland to further their and their country's interests, they would never migrate to whole another continent in the first place. It isn't easy to migrate you know.
It's all about the choice, isn't it?
Me staying in my home country doesn't improve it anyhow.
Those who try hard to improve it somehow tend to end up in jail.
So using a short poem as a way to justify the complete overhaul of American immigration policy seems a little odd.
Can't make a living in the information economy? Uncle Sam wants you!
You could argue that this is the actual natural order of things. Let the free market decide the value of an engineer, not arbitrary government regulation. It is the Silicon Valley way, after all.
If you don't object to google's selling it's services across the world on free-market principles, it'll take a rather large leap of (il)logic to constrain the employment to be restricted to the physical location of the HQ of this global company.
The free market is what the actual value of the engineers is - not how the CEOs choose to work together to suppress prices.
Au contraire. Many Americans and Europeans would get a huge and valuable smack with the clue-bat if there were no immigration restrictions, and if licensing schemes designed to create arbitrary shortages of e.g. doctors were eliminated.
Economies need to become less decentralized, and more global in their scope. Which arguable is very much a reality today, but I think this is simply the beginning.
And there's a whole host of other developments that need to happen, but I believe eventually will happen in the coming decades. We'll see a more homogenous world, yet also a more diverse one.
Don't be fooled by altruistic PR coming from Zuck and others...
That's not necessarily a consequence of there being an engineer shortage. You'd expect much the same behaviour if most people who emerged from uni, or worked commonly in IT, didn't have the criteria they were interested in.
I'd note you don't see Microsoft in this because they stayed in Washington and bought employment laws they like. So they can force employees to sign non-competes in Seattle while they poach from California that won't allow companies to do that.
Working in an auto state, I've seen that in other industries and it's actually kind of sickening. In the auto industry it's in bad taste to do that. Many auto suppliers have no-poaching in their business contracts. Which ties up a lot of the industry because everybody does business with everybody. As an EMPLOYEE you can apply to another job, but recruiters aren't allowed to cold-call between companies.
I've worked in an office where we would get cold call agents during work. They'd call all the extensions in the office and it was just offensive being put on the spot like that. I can't imagine working at Apple or Google and getting calls like that... And the work environment becomes "awkward" for the rest of the day because everybody knows everybody got a call... There's nothing good about that type of hiring practice.
Micrsoft was one of the (many) companies listed with which Google had similar non-poaching agreements.
Not really all that true, for the professions as a whole, except for medical doctors, who are far above any of the others.
Per the BLS Occupational Outlook Handbook , 2012 Median salaries for various professions:
Securities, Commodities, and Financial Services Sales Agents: $71,720
Software developers: $93,350
Physicians & Surgeons: >$187,200
None of them has yet taken me seriously, but thankfully this reduced the number of calls I was getting.
I wish more people were like you.
Disclaimer: I do the same.
The median price for a 3br house in SF is (I used zillow's numbers for this) 1.1Mil.
(btw, check the pay for the other "top 10" professions in high cost areas like SF. It does make economic sense for top students with good options to choose other fields).
The whole conspiracy has not been driven by a desire to bring down wages (most of the involved company can pay the price), but by the instability caused by an already existing shortage.
Yes, driving down wages only makes the issue worse, and lobbying for migrant workers whilst doing so is extremely hypocritical.
But at the end of the day it's a symptom of the problem, not the root cause.
"For each of these 'Restricted Hiring' companies...
"3. Additionally there are _no_ restrictions at _any_ level for engeineering candidates"
The majority of the companies included were just on a "Do Not Cold Call" list, but Google would actively recruit people from those companies based on referrals, and of course based on applications.
So, if you worked at Apple and applied to Google, Google would actively recruit you.
I fail to see how this policy has anything to do with an engineering shortage. It may well be deemed illegal, but it's certainly not as bad as you're making it out to be.
I'm sure there will be apologetics, but it's not like one side was behaving ethically.
They conspire illegally to drive down wages, then whine that not enough people want to work in this field where wages have been artificially and illegally deflated.
This field where wages are still significantly above mean values? Where are these engineers going to go en masse for better wages? Into medicine? Hello for another 10 years training. Law? Already overstaffed, and wages are similar for most anyway. Finance gets some, but isn't going to hold them all. If the engineers are in the career for the dollar, restarting in another career that will pay more is going to be difficult as a group.
A legal practice which increases competition and increases the allocation of resources to productive individuals can't be compared to an illegal practice which decreases competition.
I do not think it's ethical to scare the other party by threatening actions that you have zero intention of carrying out.
Regardless of your opinions about the morality of this practice, there's no basis for calling it collusion.
It's not to say that all engineers were doing it (which I think is a salient point), but in all these arguments, the engineers are painted as naifs who had done nothing as a group to merit this. To be clear, I don't agree with the ethics the companies displayed, I just think it's unfair that the collusion between some engineers gets glossed over amongst all the outrage.