7 ms·

How Apple, Google, and other tech companies conspired against their own workers

717 points by alienlid 7y ago

ArtDev 7y ago
By depressing tech wages, workers are forced out of big tech companies and into smaller companies with competitive salaries but fewer open positions. Big companies complain they can't find enough workers with their relatively low wages, and lobby for more H1b worker visas, depressing wages even further as foreign workers cannot change companies easily without moving back to their native countries first. I can totally imagine Steve Jobs writing that email over "no poaching" to the other big tech companies.
keepper 7y ago
So while this is bad... I don't know how to feel about this. The other side of the coin is that these companies pay WAY ABOVE average salaries. I'm intimately familiar with this having FAANG companies average of 50% more compensation than average. Especially outside of the bay area. Typical range TC Sr. SDE in nyc: 150-250k + Bonus. Typical range TC for Sr. SDE in nyc: for Google/Facebook/Amazon 300-400k ( and goes higher ). Only the most well paid Quants working in horrible environments made 500k+ There's a good portion >E5 engineers at these companies making well over that. Anti-competition is bad.. but they are at the top of the industry on compensation. :( So again, don't know how to feel about this.
- izzydata 7y ago
  Who gets to judge how much an engineer is worth to a company making billion upon billions of dollars a year? If some of these engineers are what is enabling these companies and their executives to make millions then maybe they really are worth a 1 million dollar salary.
  - inlined 7y ago
    Also, this happened many years ago. Wages have soared since this was uncovered. Now (actually 4hrs ago, the last I checked) a college hire’s signing bonus is 2/3 my base salary was 6yrs earlier.
  - DannyBee 7y ago
    Sure, but the ones who aren't doing that are also getting paid really well. In your scheme they would not :)
    - defen 7y ago
      > Sure, but the ones who aren't doing that are also getting paid really well. So, don't require a 4.3 GPA from Stanford/MIT/Caltech for entry-level back-office/maintenance type developers. It seems like you're claiming that FAANGs are overpaying non-contributors, or at least those whose impact is not easily measured. So, stop paying so much and see what kind of developers you get.
  - munk-a 7y ago
    I think the fair thing to realize, as a society, is that corporate profit taxes just make sense. If a company is operating in a high profit margin line of business it has more than enough money to invest in future growth, fairly compensate employers and owners _and_ provide a societal benefit for all those other community members that work in less high profit margin societies. Sure, you've got good healthcare and what not, why not make sure your barista has the same access before buying that third house. I applaud anyone who decides to do this of their own volition, but I think we can agree this makes sense societally and it'd just be easier if a third party was responsible for shifting the money around as needed and made sure everyone was paying proportionate to their ability.
    - fjp 7y ago
      I can't understand how people don't realize that putting some of our massive, massive wealth towards building a better society would not benefit them. Can you imagine how many more inventions and advancements there would be if everyone had access to good education? Didn't have to worry about going bankrupt or dying because they can't meet medical expenses? If we put money into things that don't necessarily directly directly go into corporate bottom lines by next financial quarter? (roads, transportation infrastructure, clean water and air...)
      - Frost1x 7y ago
        When you're super rich, you already have that better society, it just costs a bit more (nothing you can't easily afford). Who cares about the rest of the hoi polloi. That's how our society works and we applaude it by promising the potential to become one of the super rich, when much of obtaining that degree of wealth isn't earned through hard work and innovation but instead, pure situational luck and ability to curb your morals and ethics to climb over people and pull the ladder behind you.
        Frondo 7y ago
        You know, this, and you see this in the way the super-rich politicians elected to represent most of the country act. "We want to grow the pie, rather than redistribute anything, so everyone can live the American dream" -- when in reality, the pie is plenty big but verrrrry badly distributed when you're among the working poor. There was also a great video making the rounds recently about Rep. Katie Porter grilling Jamie Dimon about the base wages at his bank in Irvine, CA. She got out a posterboard and did the math on a hypothetical single mother working full-time as a teller ($16.50 an hour). After some very straightforward math, the hypothetical single mother is in the hole $587 every month. She kept pressing Dimon for how he expects that role to be filled, and he had no answer (repeating "I'll have to think about it.") Obviously, on some level he doesn't give a shit, but I think it's the sort of thing where he's also simply never confronted with the reality for someone who doesn't make $31 million a year plus whatever other non-cash he takes home.
  - keepper 7y ago
    you're right. But there's MANY other companies making similar profits.. yet not of them pay anything similar? I think you guys can't separate your dislike for these companies, with an actual, thoughtful analysis. Most oil companies make similar profits.. yet the average oil engineer makes 80-100k. With a lot more risk, and in similar high demand as a software engineer.
    - lawrenceyan 7y ago
      The skill required is much lower though. With a lower bar, it’s much easier to work as a oil rigger. All it requires is a high school degree. To be clear though, the people doing data analysis, land exploration, etc. for oil well discovery get paid much more by the way. They make similar amounts to what tech companies can offer in fact.
- kjar 7y ago
  This argument is very weak IMO. Paraphrased “I got paid happily, industry collusion to suppress wages is therefore OK”
  - skybrian 7y ago
    It was never OK but was settled long ago and compared to the many, many other forms of injustice in the world that are ongoing and more severe, why focus on this one? Even if you limit your scope to tech companies, there are more important things.
  - keepper 7y ago
    Have you actually look at wages in other industries? Why are we focusing on the companies that actually do PAY ABOVE. how about we focus on the industries that UNDER pay. Someone getting compensated many times the average income is not the person we should trying to advocate for. The market can decide that. That industrial or service worker not getting paid a living wage. THATs who we should be fighting for. I love how i'm getting downvoted for my parent comment, but no one has taken the time to compare to other industries and companies with similar profits, who pay their engineering talent SUBSTANTIALLY less. Oil industry has similar profits, yet pays engineers 80-100k.
    - sage76 7y ago
      > The market can decide that. How, since they were not allowing the market to decide that. > THATs who we should be fighting for. It's not binary. Both fights are important.
- samirillian 7y ago
  Yeah, until you compare how much they spend on wages to their market cap, which is just insanely low relative to most other industries.
- deogeo 7y ago
  Now compare the wages against CEO and shareholder compensation.
  - munk-a 7y ago
    Yea, this is where things get really stupid. The contribution of shareholders is very close to nil - the CEO may be the most impactful employee (though I think they're honestly not nearly as important as modern society says, being a replaceable cog themselves) but they are not worth the equivalent of 20 or 5000 employees.
  - keepper 7y ago
    How about we compare to engineering wages in other companies with similar profits? Pretty much any other large engineering company. Or how about the oil industry? where profits are higher, the risk to life way higher, yet engineers make 80-100k? What you have in these companies are single large shareholders vs institutional or family shareholders. That's what you're ultimately uncomfortable with. One person having so much net work.
    - deogeo 7y ago
      > How about we compare to engineering wages Why? Why not vs. CEO compensation? Is there some rule that CEOs and shareholders must make absurdly more money than workers, or society will collapse? CEO salaries are routinely defended with "that's what they're worth" - why does this not apply to the lowly worker?
- dropit_sphere 7y ago
  "Remember kids, profit is for capital, never labor. Know the difference!"
  - omega3 7y ago
    Are you paraphrasing here or quoting directly? What is the source?
  - skybrian 7y ago
    When compensation includes stock options and RSU's the lines are somewhat blurry. And isn't this what such financial incentives are for, to align incentives? But then, you have multiple classes of stock which undoes that somewhat. Incentives are never fully aligned; there are always things like principal-agent problems. So I agree in substance if not in snark: it is important to understand these things.
- cobookman 7y ago
  There is a lot of ageism in this industry. I'd be curious if SWE at FAANG is equivalent to football players in the NFL. Aka, Sure you might make more but what's the earnings over total career?
  - skybrian 7y ago
    The salaries and other compensation are often high enough that if you live modestly, invest your money, and most importantly, the stock goes up, the career might be over when you realize you have enough to retire early. But as they say, past performance is no guarantee of future results.
- fullshark 7y ago
  Remember this happened before FB / Netflix / Unicorns started an open war for talent and blew salaries up.
- deleted 7y ago
  [deleted]
- ummonk 7y ago
  You've got the timeline backwards. The compensation only went up after this collusion ended.
- defen 7y ago
  > So while this is bad... I don't know how to feel about this. Just to be clear: you are saying it's possibly ok for a cartel of billionaires to collude to suppress wages for a bunch of people making six figures? Because those employees have it "pretty good" and should be happy with what they're given, even though they are working to build world-historical fortunes and power for the business owners?
  - kjar 7y ago
    Serfdom
    - AnimalMuppet 7y ago
      Serfdom doesn't pay that well. Note well: I'm not saying that this is OK, either legally or morally. I'm just saying that the parent is way overhyping the problem.
      - goobynight 7y ago
        Naw. You're underhyping it. Creating this artificial ceiling in the low 6 figures is awful, regardless of how badly people making less than that are getting screwed. As far as I'm concerned, they're as hopeless as a bucket of crabs and we shouldn't use them as a bar or relative bar for anything. Do I-bankers look at they're comp and say "yeah that's pretty good. I'm ok getting screwed out of any more"? I think we should always be advocating for our group as hard as we can.
        AnimalMuppet 7y ago
        Absolutely everything you say could be true, and that still wouldn't make it serfdom, nor even close.
        skybrian 7y ago
        These aren't the only choices. I think our industry is actually a little better with that, where we have some software engineers advocating for more money for the contractors. [1] [1] https://www.vox.com/2019/4/4/18293900/google-contractors-benefits-policy https://www.vox.com/2019/4/4/18293900/google-contractors-ben...
inlined 7y ago
One of the things that made my mind explode was that this was blatantly recommended in The Hard Thing About Hard Things. Horowitz argues that your relationship with your business partner is worth more than the employee and you shouldn’t entertain solicitations for employment.
- aswanson 7y ago
  I mean, at least he kept it real.
- munk-a 7y ago
  This is why, as an employee, I am not willing to put my neck out for my employer - modern society and goings on are a pretty clear lesson that employees that take risks for a company end up eating them and nobody higher up cares (unless it's essentially free to care, which is more easily explained by self-interested behavior than any sort of altruism).
- kjar 7y ago
  Reminds me of the work “Disposable People”
- Nevermark 7y ago
  Balancing the risk/reward of poaching employees from a partner company makes sense. This is not about backroom agreements to artificially keep wages down, but about weighing the pro's and con's any particular action which could derail important projects. If the employee is worth more than the risks of poaching them, then do so. If not, it would be foolhardy to do so.
- basetop 7y ago
  Sadly, employees are just another resource ( human resource ) in the modern world.
drdeadringer 7y ago
I don't know how this is still a super secret unknown to the public at large. This has been reported for years. What am I missing?
- Spoom 7y ago
  > The project was made possible by a grant from the eBay Settlement Fund.
- arebop 7y ago
  These employees aren't very sympathetic victims. Nobody wants to hear about how some 5%-er with a bunch of good alternatives should be making more and having more choices about who to work for. You'll even find in the comments here that many of the affected employees themselves feel they got at worst a fair deal, because after all some (most!) workers get paid less and work in harsher conditions and so forth.
turc1656 7y ago
Notice the difference: "Top executives of leading tech companies secretly agreed among themselves not to hire each other’s employees" "...brought charges against the companies" They should have been indicting both, or just the executives for their explicit role in this criminal behavior. I really detest the lack of individual accountability in all these cases when we deal with large companies. If this was a couple of small, local competitors who were the only two [whatever] in the area and they did this, I guarantee you the owners would be individually indicted.
- deleted 7y ago
  [deleted]
- munk-a 7y ago
  I agree, there is far too much ability to transfer liability in the modern world which lets this sort of stuff get abstract and easier to dismiss. Companies should be held accountable to the extent their growth has encouraged bad behavior, but individuals at that company committed the behavior and, if they were instructed to do so and blindly followed then... 1. "Just following orders" isn't now and has never been a valid excuse 2. Go after the coercers or modify our understanding of liability to allow those targeted to make the argument that their superiors deserve to repay them every bit of penalty they owed. Really, in the modern world, just sue someone and tell them they're on the hook but they'll be allowed to sue whoever is responsible for their portion of the responsibility and watch this all work itself out quickly.
  - crowdpleaser 7y ago
    "Just following orders" was a valid excuse until the Nuremberg trials.
    - mtgx 7y ago
      You don't think people were executed post-war for "just following orders" before the Nuremberg trials? In other words, do you really think such people got off easy before the Nuremberg trials? If anything, much worse has happened to them throughout history, because the kings and dictators didn't have to put them through a judicial process.
Animats 7y ago
It should be possible to crunch through LinkedIn histories and determine where there's collusion between employers. If moves between employer A and employer B are lower than between A to C and C to B, something funny is going on.
- stcredzero 7y ago
  With something as complex as employment decisions, there could be a lot of confounding factors. Example: What if A and B are located somewhere more desirable? There may naturally be a desire to stay where you are and less impetus to move. A and B might be in a class of company which confers more prestige, so there would be less impetus to move. A and B might entail more risk somehow. There are many of these. Using bulk statistics to show things like bias and collusion is fraught with these issues.
  - tomjakubowski 7y ago
    If A and B are both located in desirable locations, and C is not, then the strangeness of there being more A->C->B jumps than A->B is only stronger. If A and B are in the same desirable location, all the weirder.
    - stcredzero 7y ago
      If A and B are both located in desirable locations, and C is not, then the strangeness of there being more A->C->B jumps than A->B is only stronger. Again, you're assuming that there only a few entirely orthogonal variables. If A and B are both located in a desirable location, the cost of moving to A or the cost of moving to B might be high enough, such that it's only justified if there is a large increase in salary. So this factor might well apply more to moving from C->A than it would A->B or B->A. The same housing expenses might also motivate other people to move from A->C. In this case, you might well see more A->C->B jumps than A->B. However, none of these are cleanly applicable to real people in the real world. We're not dealing with particles or spherical cows here.
      - 7y ago
fullshark 7y ago
It is pretty amazing how this story was memory-holed by so many in the industry.
DontGiveTwoFlux 7y ago
Can any member of the class lawsuit here comment on the settlement? How did that work out for you?
- shereadsthenews 7y ago
  Not a member of that class but one of the things that happened as a result of these revelations was that everyone at Google got a large raise (much larger than typical annual raises) and a substantial one-time cash bonus which appeared to be, during the announcement, just Eric being Uncle Moneybags but just after the all-hands we all found out the reason from the newspapers.
  - inlined 7y ago
    Are you talking about the 2010 adjustment or something in more recent years. I don’t remember this.
    - hopler 7y ago
      2010
- throwawwway 7y ago
  I was a member of the class. After the settlement went through, I remember receiving a few large booklets in the mail from a law firm explaining the settlement and offering the opportunity to opt out. After what seemed like a really long time - at least a year - I received a check for about $5000, which I had to pay taxes on, so it ended up being around $3000 net. I had left the company by that time, but still owned a substantial amount of stock, so I wouldn't be surprised if I ended up losing more from the negative impact on the stock price than I got in the settlement. The people who really came out ahead in this were the lawyers, who took something like 25% of the settlement for themselves.
- dnr 7y ago
  I got some stuff in the mail, and eventually two checks for the two phases. I think they were something like $1100 and $7000. I was kind of annoyed because the initial settlement was apparently so embarrassing that the _judge_ rejected it, something like $330M on supposedly $3B in lost wages. So they went back and increased it to the $435M, still nowhere close to what it should have been. Of course at this point the lawyers' incentives and the class' incentives are not aligned at all, so that's how it ended.
wyldfire 7y ago
> A separate class action lawsuit was filed on behalf of 64,000 tech workers for an estimated $3 billion in lost wages. Before the case went to trial, the companies settled for a total of $435 million. How would we know if they resumed the bad behavior?
- rak00n 7y ago
  That's only $6796.87 per person.
  - dsfyu404ed 7y ago
    Depending on how much the mean/median person's base salary is that's on the order of a bonus. On one hand it's not that much. On the other hand I'd be pissed if I didn't get my bonus because of some back room deal between execs.
    - wyldfire 7y ago
      > that's on the order of a bonus It's likely far less, considering the fees paid to the law firm(s). ...and it's probably denominated in gift cards to the various companies' stores.
    - inlined 7y ago
      It’s not nearly the amount of an annual bonus, which is typically about 15% base pay. This is the order of a spot bonus (e.g. the director wants to thank you for working double time to make a product launch happen in time for a conference). Or it’s the price of 1-3 successful referrals to a company.
      - leesec 7y ago
        "It’s not nearly the amount of an annual bonus, which is typically about 15% base pay." Not in plenty of industries.
cliffy 7y ago
The settlement is laughable given the number of people whose salaries were held down as a result of this collusion. It's not just workers at these companies that suffer. It has a network effect of holding salaries down at companies which aren't even colluding. Another example of (usually giant) companies deciding to risk breaking the law because its cheaper in the long run to do so.
- skybrian 7y ago
  It was a long time ago. I got a raise out of it and later retired early, and I'm a pretty average software engineer, for Google anyway. Your argument that I "suffered" when actually they treated me very well by almost any standard isn't going to work. Based on what I've heard about current salaries for in-demand people, I think it's safe to say that any depressing effect on software engineers' salaries is long gone? And if not, and this is what holding down salaries looks like, imagine what the housing market would be like without it.
  - cliffy 7y ago
    This reads like Stockholm Syndrome at its finest. You're OK with them paying you less because you still got paid well by some standard? You (and as a result many other people) would be making more both in the past and today if they hadn't colluded. For at least some subset of those affected by this collusion the salary lost will make a significant difference in their families' and their own quality of life either now or in the future.
    - ben_jones 7y ago
      It sounds like someone who made enough money to have their empathy towards others seriously diluted.
    - skybrian 7y ago
      It was never OK, but it was settled, they don't do that anymore, and besides, Steve Jobs (who apparently started it) is dead. And as for the people theoretically adversely affected, you'd have to figure out who they are, which wouldn't be easy, since it's people who were in demand enough that they might have started a bidding war. There is not much more justice to be had in this case. If you're interested in pursuing justice, why not focus on current problems with identifiable victims?
skybrian 7y ago
This happened but it's old news. I remember when they announced the raise we got as a result. If you never heard of it, you weren't affected.
DINKDINK 7y ago
I wonder how much small firms/startups have /benefited/ from this arrangement. By artificially reducing demand for labor, big tech firms have effectively made it more profitable for smaller firms to compete against them.
- rightbyte 7y ago
  I think you got it the other way around. They have decreased the price of labour and thus increased the demand for it. This is more or less an employer union.
  - jorgemf 7y ago
    I don't get your point. As I understand it they have decreased the demand to decrease the price.
    - rightbyte 7y ago
      It's a approximately a zero sum game in the cartel. That was my point. If the price goes down the demand goes up. So the total demand for programmers increase (the demand for the other companies programmers decrease, of-course). It's a subjective matter of semantics, though.
  - abvdasker 7y ago
    I prefer "buyer cartel". It sounds more sinister.
- ummonk 7y ago
  That, along with regulatory enforcement, was basically what broke the collusion scheme. Facebook as a growing company did not want to play ball, and aggressively poached from the other tech companies with bigger offers, forcing them to raise their compensation to retain employees.
paul7986 7y ago
Rules sooner or later will apply! They didn’t apply to Harvey Weinstein until they did!
deleted 7y ago
[deleted]
thorwasdfasdf 7y ago
It's interesting the lengths they'll go to rip off their own workers, and yet they won't even make the slightest effort to hire in locations where labor is much cheaper. There's countless places in the US where they could've fairly paid 1/3 less. And significantly more savings outside the US.
- skybrian 7y ago
  These companies have offices all over the world, including China and India.
- chillacy 7y ago
  A lot of companies have satellite offices in smaller cities with lower CoL. But they still want to be in urban centers with lots of people and next to strong CS colleges.
ChuckMcM 7y ago
The critical thing here is that if pay was uncontrolled, then skilled employees could market themselves to the highest payer, and that would put more of the profits of the work of those employees into employee pay instead of into company margin (aka profit). It is pretty clear when you look at the revenue per employee numbers at some of these 'digital product' companies (specifically Google and Facebook), that rank and file employees are not sharing equally with management in the returns. That is not to say that pay is bad, or that wage theft is going on (extreme positions), employees in California at least are at will and can quit at any time to offer their services to another player. The regulatory requirement though is to identify and prevent collusion between those players in keeping salaries low.
- nathanvanfleet 7y ago
  > That is not to say that pay is bad, or that wage theft is going on (extreme positions), employees in California at least are at will and can quit at any time to offer their services to another player. The regulatory requirement though is to identify and prevent collusion between those players in keeping salaries low. Wait, but isn't this situation actually making them getting hired at other players much more difficult due to the collusion?
  - skybrian 7y ago
    It was not "much more difficult." They didn't have recruiters calling them, which I guess is market information of a sort.
    - mercutio2 7y ago
      This is the part of the whole internet-anger about this I've never understood. I hate having recruiters call me. It's actively annoying. Having only Facebook recruiters call me was strictly better than the alternative that all major tech company recruiters cold call me, which started happening right after this broke. I'm totally in favor of distributing more profits for all enterprises to workers, tech workers included, but "we agreed to not annoy one another's workers, but we're happy to hire when they apply" isn't really the story people tell. But that was my (and it sounds like your) experience of this.
matz1 7y ago
Employee compensation at these companies significantly tied to the stock price. So if these practice somehow outlawed, doesn't mean that company will have to spend more thus lower the stock price thus lower the employee compensation ?
deleted 7y ago
[deleted]
gok 7y ago
> Top executives of leading tech companies secretly agreed among themselves not to hire each other’s employees That's not accurate. The agreement was about recruiters cold-calling each other's employees. Employees were free to reach out on their own between companies. Workers routinely switched companies while the agreement was in effect. I still think it was bullshit, but it wasn't quite as egregious as the article makes it sound. Disclaimer: I was one of the affected employees, and got a share of the settlement.
- elicash 7y ago
  Recruitment is a vital part of the work companies do and they traditionally pour a ton of resources into that aspect of hiring. But yes, I agree specifying the deal was "limited" to recruitment hiring would be better and more precise. That shouldn't be used to diminish how vast of a deal this was. But I generally agree with you.
- arebop 7y ago
  Your statement is also not accurate, because there were several variants of "the agreement" and for some pairs of companies the agreement extended beyond cold-calling [https://www.lieffcabraser.com/antitrust/high-tech-employees/ https://www.lieffcabraser.com/antitrust/high-tech-employees/]. I'm sure multiple careers were set back when their prospective employer's HR department notified their current employer's HR department about the disloyalty.
  - gok 7y ago
    Those allegations didn't have very strong evidence. They were repeated by some lawyers looking for people to opt out of the class action. When I asked for details they didn't have anything.
- morganw 7y ago
  A lot of the discovery was never redacted & released; it remains under seal. I think there was more going on like a courtesy "we're going to hire your person. You want us to turn them down & earn a chit for the future?".
splonk 7y ago
I was a member of the class and got a settlement. It's been quite some time so I don't recall the details exactly, but I think the settlement was divided through some combination of the amount of time you were employed through the time period in question, and maybe base salary or title? I would have been in the maximum bracket for time but probably pretty low in the salary/title spectrum as software engineers go. I think the amount I got was just under $7k. FWIW, I didn't feel particularly underpaid at the time, given that I was making way more than I'd ever had at any other point in my life, although I was relatively junior then and didn't have a good grip on the market. It ended up just being a bonus for essentially no effort on my part. I don't hold any major personal antipathy towards any part of the process.
nostrademons 7y ago
So I was at one of these companies when the scandal broke. I didn't get screwed quite so much as my coworkers, since I'd only been working there for a year or so. The settlement was a joke - I got about $1100, but my compensation increased by roughly $100K/year the year after the cartel broke, and kept rising. Can't say I'm terribly pleased about either the wage-fixing or the settlement, but... My wife works in philanthropy, and one of her jobs is investing in homeless shelters. We were talking the other day about how the Bay Area's housing/homelessness crisis is a direct consequence of the collapse of the high-tech wage-fixing cartel. Before 2010, the wage distribution from one of these huge companies was that founders and VCs would make billions, ~1000 early employees would end up with millions, and the rest of the employees live comfortable upper-middle-class lifestyles. The ~1000 employees who could cash out pre-IPO stock options would bid up prices in Hillsborough/Atherton/PacHeights/Woodside to ~$5M, but the rest of the Bay Area would be priced at what an ordinary professional could afford. After the cartel broke, the compensation structure changed so we have ~100K engineers each making ~$300-400K/year. That's enough to buy all the available housing inventory in the region. So now house prices in Mountain View and Sunnyvale go from $800K -> $2.4M, and you must be a dual-tech-income family to afford a house. I say this not to imply that the cartel was a good thing (cartels are bad, and I'd much rather the solution be greater wage equality for everyone and building more housing so everyone can stay in the area), but to highlight the problem of unintended consequences. I've seen many people ask "Why don't companies hire remote workers at Silicon Valley wages?" and in the same breath say "Because I would never move to the third-world hellhole that the Bay Area has become", not realizing that if they did hire remote workers, the same thing would happen in their communities. Inflation is the flip side of higher wages; when everybody gets paid more, everything costs more.
- chillacy 7y ago
  Just a nit: Inflation is the result of too much money chasing too few goods, so not everything increases in price. Electronics and mass consumer goods typically stay the same price. Only goods which have limited supply and no substitution get more expensive, like housing. Otherwise everything else makes sense.
  - 7y ago
bvd 7y ago
I really think that this is crazy. I mean, that they did these kinds of agreements and actually thought they wouldn't get caught.
SupperMonty 7y ago
Silicon Valley companies are really interesting sometimes for entertainment value mostly. I doubt we are going to see any great progress coming out of that place - except maybe more spying and the like. I don't know if you noticed those badges the drones there usually carry with a phone number, where you can report "inappropriate conduct". For some reason I had this image in my mind about someone calling to ask if it was okay to eat a ham sandwich, if one of your colleagues was a muslim and those people operating those phone lines would then have morning standups, where they would discuss such important issues. So I was minding my own business one day doing what I do and suddenly get called upon by the big man to explain why I was a jew hater. Apparently someone had picked up that I had made a comment about jews at some point. I may or may not have made a sarcastic joke about some news story involving one or two jews. No idea, but being a bit autistic and odd person in general, that may have happened. Its not like I burned a Quran or something like that, but... I made an attempt at explaining how that didn't make any sense, since I was a jew myself and had even lived in Israel as a child. Apparently that didn't really make a difference. The machinery had been set in motion and I had been stamped as incompatible with Apple values. I tend to agree with that..
JTbane 7y ago
IMO, there ought to be a law that makes it easier to pierce the corporate veil in these sorts of cases.
tbarbugli 7y ago
> estimated $3 billion in lost wages. Before the case went to trial, the companies settled for a total of $435 million So you get busted doing something illegal and walk away with a 2.5Billion in your pocket and 0 jail time. How do you expect execs to not do this all the time?
- khalilravanna 7y ago
  If the number of 64,000 employees is correct, even that $3B seems like a pittance. One commenter wrote their wage jumped by $100k the year after this settlement. $3B / 64k ~= $50k per person, less than half that number[1]. In the end they only had to pay an amount that was < $7k per person. What a joke. My guess is the executives who orchestrated this got a big bonus as a result. And why wouldn't they? They optimized for the corporation's good. How do we collectively start incentivizing not being evil like this? 1. Sure it's only one data point to extrapolate off of but anecdotally hearing that people were paid $100-150k in SF while this was going on is a substantial amount of wage suppression given that those same people employed now would be making $300-500k at those same companies without blinking an eye.
  - hopler 7y ago
    It was orchestrated by CEOs. They get big bonuses regardless. Also you are conflating base salary with total comp in your example.
    - khalilravanna 7y ago
      A fair point about CEOs but the leaders of engineering had to sign off on this all along the way. Of course my math is back of the envelope and nothing to go by but it definitely hints at the massive discrepancy. To your point about salary/comp, Netflix is at least one example of a company that allows (allowed?) comp in the form of 100% salary.
- skybrian 7y ago
  We are talking about a hypothetical wage calculation with many unknowns versus a cash settlement. In truth, nobody knows what would have happened in the counterfactual case, but settlements require picking a number.
yonran 7y ago
I think the tech anti-poaching lawsuit is kind of a strange case because these are the highly-paid employees, not entry-level laborers, and the free market for top employees is likely to increase inequality, which is sort of the opposite of the goal of the Sherman Act. It’s similar to how collusion in the NBA reduces wages at the top while increasing team profits as well as enabling higher wages at the bottom (sports teams are excluded from the Sherman antitrust act), making a more viable ecosystem (see Planet Money episode https://www.npr.org/sections/money/2018/07/11/628137929/episode-427-lebron-james-is-still-underpaid https://www.npr.org/sections/money/2018/07/11/628137929/epis...). So it’s possible that forcing a free market of top employees will increase wage inequality. And ironically, politicians now complain that these tech companies are paying too much, driving up the rent of housing (thanks to the region’s restricted housing supply), since the lack of housing channels high wages into the pockets of landlords. How should the Bay Area economy have grown in the past decade if we had wanted to prevent the poverty created by tech and landlord wealth? We should have allowed far more housing supply, allowing apartments to bid down rents and also allowing new workers to bid down wages. We should have had higher taxes on land, allowing the poor to share the wealth created by the increasing concentration of employment centers. And we should have had higher national income taxes, spreading the wealth from the highest-paid workers in the winners-take-all economy to the rest. But given the dysfunctional local government (restrictive zoning), dysfunctional state government (Proposition 13), and dysfunctional national government (low top tiers and low taxes on homeowner rents), the collusion that the tech companies did was not clearly a bad thing. The Sherman Act is about enabling the price signal to be the “central nervous system of the economy” (U.S. v. Socony-Vacuum Oil Co) to mobilize labor and capital. But when the dominant factor in the labor market is local governments’ restrictions on the housing supply which prevent mobility, I don’t see much point in enforcing the antitrust act against companies.
john_jr_smith 7y ago
This was replaced by all big tech companies matching market rates. Google pays 90-95 percentile of the market. Apple pays 90-95 percentile of market. They reevaluate each year. But since they are the biggest, highest paying ones, the increase in salaries is minimal. Consider: From 2013 to 2018, Google's revenue rose 2.5x. Google's employee count rose 1.8x. Google's salaries did not rise 33%. You might argue that there is more supply, but that's extremely unlikely. CS degree graduations rose single digit percent (if at all), and graduates make a small portion of the total working force. The same calculation I'd expect to hold for any of the big five companies.
yeahitslikethat 7y ago
I can't reconcile how anyone with integrity would work at these firms. Which then it follows that only people without integrity work at these firms. Now it all makes sense.
ngcc_hk 7y ago
669 ...
benologist 7y ago
These companies still routinely conspire against their own workers to slightly increase profits by reducing benefits, salaried roles, sick pay etc.
- Nevermark 7y ago
  And employees conspire to get more by gaining experience then moving to other companies, differentiating themselves and asking for raises? You are describing negotiation. Companies are not supposed to want to raise wages any more than employees are supposed to want to lower wages. The balance is how the market puts a value on different kinds of work and skills.
  - benologist 7y ago
    Sometimes it's a negotiation between parties each with some measure of power, but it can also be completely unilateral like using layoffs and redundancies and shutdowns and bankruptcies as an accounting tool and not necessarily because they're losing money or making strategic changes.
scottlegrand2 7y ago
I think the latest expression of this concept came out when a friend of mine was up for a senior role at Google and they ended consideration when they suddenly decided that he switched jobs too often to be a leader, but they were happy to continue considering him for a role beneath what he currently already had.
- Nevermark 7y ago
  Isn't that a reasonable concern? The decision is specific to that one candidate and related directly to the candidates work history. Is there no N, where N is the number of jobs someone has had in the last five years, where you would consider someone to be a questionable candidate for a key position?
briantakita 7y ago
Powerful people colluding? Sounds like one of those "conspiracy theories"</sarc> Given how these large companies have a penchant to buy a promising company just to kill the product a couple years later, it seems like it's in the market's best interest to encourage distribution of power. This includes encouraging entrepreneurship with technologists & incentives to grow individual businesses to profitability, while discouraging M & A.
acdc4life 7y ago
“A separate class action lawsuit was filed on behalf of 64,000 tech workers for an estimated $3 billion in lost wages.“ So they went through all this effort to save 3 billion/64000 = $46,875 per employee. Is that how it should be interpreted? If so, these executives are greedy scum.
Proven 7y ago
I like that because it increases my own chances of getting a job at FANG.

717 points by alienlid 7y ago

By depressing tech wages, workers are forced out of big tech companies and into smaller companies with competitive salaries but fewer open positions. Big companies complain they can't find enough workers with their relatively low wages, and lobby for more H1b worker visas, depressing wages even further as foreign workers cannot change companies easily without moving back to their native countries first. I can totally imagine Steve Jobs writing that email over "no poaching" to the other big tech companies.

keepper 7y ago

So while this is bad... I don't know how to feel about this. The other side of the coin is that these companies pay WAY ABOVE average salaries. I'm intimately familiar with this having FAANG companies average of 50% more compensation than average. Especially outside of the bay area. Typical range TC Sr. SDE in nyc: 150-250k + Bonus. Typical range TC for Sr. SDE in nyc: for Google/Facebook/Amazon 300-400k ( and goes higher ). Only the most well paid Quants working in horrible environments made 500k+ There's a good portion >E5 engineers at these companies making well over that. Anti-competition is bad.. but they are at the top of the industry on compensation. :( So again, don't know how to feel about this.

izzydata 7y ago
Who gets to judge how much an engineer is worth to a company making billion upon billions of dollars a year? If some of these engineers are what is enabling these companies and their executives to make millions then maybe they really are worth a 1 million dollar salary.
- inlined 7y ago
  Also, this happened many years ago. Wages have soared since this was uncovered. Now (actually 4hrs ago, the last I checked) a college hire’s signing bonus is 2/3 my base salary was 6yrs earlier.
- DannyBee 7y ago
  Sure, but the ones who aren't doing that are also getting paid really well. In your scheme they would not :)
  - defen 7y ago
    > Sure, but the ones who aren't doing that are also getting paid really well. So, don't require a 4.3 GPA from Stanford/MIT/Caltech for entry-level back-office/maintenance type developers. It seems like you're claiming that FAANGs are overpaying non-contributors, or at least those whose impact is not easily measured. So, stop paying so much and see what kind of developers you get.
- munk-a 7y ago
  I think the fair thing to realize, as a society, is that corporate profit taxes just make sense. If a company is operating in a high profit margin line of business it has more than enough money to invest in future growth, fairly compensate employers and owners _and_ provide a societal benefit for all those other community members that work in less high profit margin societies. Sure, you've got good healthcare and what not, why not make sure your barista has the same access before buying that third house. I applaud anyone who decides to do this of their own volition, but I think we can agree this makes sense societally and it'd just be easier if a third party was responsible for shifting the money around as needed and made sure everyone was paying proportionate to their ability.
  - fjp 7y ago
    I can't understand how people don't realize that putting some of our massive, massive wealth towards building a better society would not benefit them. Can you imagine how many more inventions and advancements there would be if everyone had access to good education? Didn't have to worry about going bankrupt or dying because they can't meet medical expenses? If we put money into things that don't necessarily directly directly go into corporate bottom lines by next financial quarter? (roads, transportation infrastructure, clean water and air...)
    - Frost1x 7y ago
      When you're super rich, you already have that better society, it just costs a bit more (nothing you can't easily afford). Who cares about the rest of the hoi polloi. That's how our society works and we applaude it by promising the potential to become one of the super rich, when much of obtaining that degree of wealth isn't earned through hard work and innovation but instead, pure situational luck and ability to curb your morals and ethics to climb over people and pull the ladder behind you.
      - Frondo 7y ago
        You know, this, and you see this in the way the super-rich politicians elected to represent most of the country act. "We want to grow the pie, rather than redistribute anything, so everyone can live the American dream" -- when in reality, the pie is plenty big but verrrrry badly distributed when you're among the working poor. There was also a great video making the rounds recently about Rep. Katie Porter grilling Jamie Dimon about the base wages at his bank in Irvine, CA. She got out a posterboard and did the math on a hypothetical single mother working full-time as a teller ($16.50 an hour). After some very straightforward math, the hypothetical single mother is in the hole $587 every month. She kept pressing Dimon for how he expects that role to be filled, and he had no answer (repeating "I'll have to think about it.") Obviously, on some level he doesn't give a shit, but I think it's the sort of thing where he's also simply never confronted with the reality for someone who doesn't make $31 million a year plus whatever other non-cash he takes home.
- keepper 7y ago
  you're right. But there's MANY other companies making similar profits.. yet not of them pay anything similar? I think you guys can't separate your dislike for these companies, with an actual, thoughtful analysis. Most oil companies make similar profits.. yet the average oil engineer makes 80-100k. With a lot more risk, and in similar high demand as a software engineer.
  - lawrenceyan 7y ago
    The skill required is much lower though. With a lower bar, it’s much easier to work as a oil rigger. All it requires is a high school degree. To be clear though, the people doing data analysis, land exploration, etc. for oil well discovery get paid much more by the way. They make similar amounts to what tech companies can offer in fact.
kjar 7y ago
This argument is very weak IMO. Paraphrased “I got paid happily, industry collusion to suppress wages is therefore OK”
- skybrian 7y ago
  It was never OK but was settled long ago and compared to the many, many other forms of injustice in the world that are ongoing and more severe, why focus on this one? Even if you limit your scope to tech companies, there are more important things.
- keepper 7y ago
  Have you actually look at wages in other industries? Why are we focusing on the companies that actually do PAY ABOVE. how about we focus on the industries that UNDER pay. Someone getting compensated many times the average income is not the person we should trying to advocate for. The market can decide that. That industrial or service worker not getting paid a living wage. THATs who we should be fighting for. I love how i'm getting downvoted for my parent comment, but no one has taken the time to compare to other industries and companies with similar profits, who pay their engineering talent SUBSTANTIALLY less. Oil industry has similar profits, yet pays engineers 80-100k.
  - sage76 7y ago
    > The market can decide that. How, since they were not allowing the market to decide that. > THATs who we should be fighting for. It's not binary. Both fights are important.
samirillian 7y ago
Yeah, until you compare how much they spend on wages to their market cap, which is just insanely low relative to most other industries.
deogeo 7y ago
Now compare the wages against CEO and shareholder compensation.
- munk-a 7y ago
  Yea, this is where things get really stupid. The contribution of shareholders is very close to nil - the CEO may be the most impactful employee (though I think they're honestly not nearly as important as modern society says, being a replaceable cog themselves) but they are not worth the equivalent of 20 or 5000 employees.
- keepper 7y ago
  How about we compare to engineering wages in other companies with similar profits? Pretty much any other large engineering company. Or how about the oil industry? where profits are higher, the risk to life way higher, yet engineers make 80-100k? What you have in these companies are single large shareholders vs institutional or family shareholders. That's what you're ultimately uncomfortable with. One person having so much net work.
  - deogeo 7y ago
    > How about we compare to engineering wages Why? Why not vs. CEO compensation? Is there some rule that CEOs and shareholders must make absurdly more money than workers, or society will collapse? CEO salaries are routinely defended with "that's what they're worth" - why does this not apply to the lowly worker?
dropit_sphere 7y ago
"Remember kids, profit is for capital, never labor. Know the difference!"
- omega3 7y ago
  Are you paraphrasing here or quoting directly? What is the source?
- skybrian 7y ago
  When compensation includes stock options and RSU's the lines are somewhat blurry. And isn't this what such financial incentives are for, to align incentives? But then, you have multiple classes of stock which undoes that somewhat. Incentives are never fully aligned; there are always things like principal-agent problems. So I agree in substance if not in snark: it is important to understand these things.
cobookman 7y ago
There is a lot of ageism in this industry. I'd be curious if SWE at FAANG is equivalent to football players in the NFL. Aka, Sure you might make more but what's the earnings over total career?
- skybrian 7y ago
  The salaries and other compensation are often high enough that if you live modestly, invest your money, and most importantly, the stock goes up, the career might be over when you realize you have enough to retire early. But as they say, past performance is no guarantee of future results.
fullshark 7y ago
Remember this happened before FB / Netflix / Unicorns started an open war for talent and blew salaries up.
deleted 7y ago
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ummonk 7y ago
You've got the timeline backwards. The compensation only went up after this collusion ended.
defen 7y ago
> So while this is bad... I don't know how to feel about this. Just to be clear: you are saying it's possibly ok for a cartel of billionaires to collude to suppress wages for a bunch of people making six figures? Because those employees have it "pretty good" and should be happy with what they're given, even though they are working to build world-historical fortunes and power for the business owners?
- kjar 7y ago
  Serfdom
  - AnimalMuppet 7y ago
    Serfdom doesn't pay that well. Note well: I'm not saying that this is OK, either legally or morally. I'm just saying that the parent is way overhyping the problem.
    - goobynight 7y ago
      Naw. You're underhyping it. Creating this artificial ceiling in the low 6 figures is awful, regardless of how badly people making less than that are getting screwed. As far as I'm concerned, they're as hopeless as a bucket of crabs and we shouldn't use them as a bar or relative bar for anything. Do I-bankers look at they're comp and say "yeah that's pretty good. I'm ok getting screwed out of any more"? I think we should always be advocating for our group as hard as we can.
      - AnimalMuppet 7y ago
        Absolutely everything you say could be true, and that still wouldn't make it serfdom, nor even close.
      - skybrian 7y ago
        These aren't the only choices. I think our industry is actually a little better with that, where we have some software engineers advocating for more money for the contractors. [1] [1] https://www.vox.com/2019/4/4/18293900/google-contractors-benefits-policy https://www.vox.com/2019/4/4/18293900/google-contractors-ben...

inlined 7y ago

One of the things that made my mind explode was that this was blatantly recommended in The Hard Thing About Hard Things. Horowitz argues that your relationship with your business partner is worth more than the employee and you shouldn’t entertain solicitations for employment.

aswanson 7y ago
I mean, at least he kept it real.
munk-a 7y ago
This is why, as an employee, I am not willing to put my neck out for my employer - modern society and goings on are a pretty clear lesson that employees that take risks for a company end up eating them and nobody higher up cares (unless it's essentially free to care, which is more easily explained by self-interested behavior than any sort of altruism).
kjar 7y ago
Reminds me of the work “Disposable People”
Nevermark 7y ago
Balancing the risk/reward of poaching employees from a partner company makes sense. This is not about backroom agreements to artificially keep wages down, but about weighing the pro's and con's any particular action which could derail important projects. If the employee is worth more than the risks of poaching them, then do so. If not, it would be foolhardy to do so.
basetop 7y ago
Sadly, employees are just another resource ( human resource ) in the modern world.

drdeadringer 7y ago

I don't know how this is still a super secret unknown to the public at large. This has been reported for years. What am I missing?

Spoom 7y ago
> The project was made possible by a grant from the eBay Settlement Fund.
arebop 7y ago
These employees aren't very sympathetic victims. Nobody wants to hear about how some 5%-er with a bunch of good alternatives should be making more and having more choices about who to work for. You'll even find in the comments here that many of the affected employees themselves feel they got at worst a fair deal, because after all some (most!) workers get paid less and work in harsher conditions and so forth.

turc1656 7y ago

Notice the difference: "Top executives of leading tech companies secretly agreed among themselves not to hire each other’s employees" "...brought charges against the companies" They should have been indicting both, or just the executives for their explicit role in this criminal behavior. I really detest the lack of individual accountability in all these cases when we deal with large companies. If this was a couple of small, local competitors who were the only two [whatever] in the area and they did this, I guarantee you the owners would be individually indicted.

deleted 7y ago
[deleted]
munk-a 7y ago
I agree, there is far too much ability to transfer liability in the modern world which lets this sort of stuff get abstract and easier to dismiss. Companies should be held accountable to the extent their growth has encouraged bad behavior, but individuals at that company committed the behavior and, if they were instructed to do so and blindly followed then... 1. "Just following orders" isn't now and has never been a valid excuse 2. Go after the coercers or modify our understanding of liability to allow those targeted to make the argument that their superiors deserve to repay them every bit of penalty they owed. Really, in the modern world, just sue someone and tell them they're on the hook but they'll be allowed to sue whoever is responsible for their portion of the responsibility and watch this all work itself out quickly.
- crowdpleaser 7y ago
  "Just following orders" was a valid excuse until the Nuremberg trials.
  - mtgx 7y ago
    You don't think people were executed post-war for "just following orders" before the Nuremberg trials? In other words, do you really think such people got off easy before the Nuremberg trials? If anything, much worse has happened to them throughout history, because the kings and dictators didn't have to put them through a judicial process.

Animats 7y ago

It should be possible to crunch through LinkedIn histories and determine where there's collusion between employers. If moves between employer A and employer B are lower than between A to C and C to B, something funny is going on.

stcredzero 7y ago
With something as complex as employment decisions, there could be a lot of confounding factors. Example: What if A and B are located somewhere more desirable? There may naturally be a desire to stay where you are and less impetus to move. A and B might be in a class of company which confers more prestige, so there would be less impetus to move. A and B might entail more risk somehow. There are many of these. Using bulk statistics to show things like bias and collusion is fraught with these issues.
- tomjakubowski 7y ago
  If A and B are both located in desirable locations, and C is not, then the strangeness of there being more A->C->B jumps than A->B is only stronger. If A and B are in the same desirable location, all the weirder.
  - stcredzero 7y ago
    If A and B are both located in desirable locations, and C is not, then the strangeness of there being more A->C->B jumps than A->B is only stronger. Again, you're assuming that there only a few entirely orthogonal variables. If A and B are both located in a desirable location, the cost of moving to A or the cost of moving to B might be high enough, such that it's only justified if there is a large increase in salary. So this factor might well apply more to moving from C->A than it would A->B or B->A. The same housing expenses might also motivate other people to move from A->C. In this case, you might well see more A->C->B jumps than A->B. However, none of these are cleanly applicable to real people in the real world. We're not dealing with particles or spherical cows here.
    - 7y ago

fullshark 7y ago

It is pretty amazing how this story was memory-holed by so many in the industry.

DontGiveTwoFlux 7y ago

Can any member of the class lawsuit here comment on the settlement? How did that work out for you?

shereadsthenews 7y ago
Not a member of that class but one of the things that happened as a result of these revelations was that everyone at Google got a large raise (much larger than typical annual raises) and a substantial one-time cash bonus which appeared to be, during the announcement, just Eric being Uncle Moneybags but just after the all-hands we all found out the reason from the newspapers.
- inlined 7y ago
  Are you talking about the 2010 adjustment or something in more recent years. I don’t remember this.
  - hopler 7y ago
    2010
throwawwway 7y ago
I was a member of the class. After the settlement went through, I remember receiving a few large booklets in the mail from a law firm explaining the settlement and offering the opportunity to opt out. After what seemed like a really long time - at least a year - I received a check for about $5000, which I had to pay taxes on, so it ended up being around $3000 net. I had left the company by that time, but still owned a substantial amount of stock, so I wouldn't be surprised if I ended up losing more from the negative impact on the stock price than I got in the settlement. The people who really came out ahead in this were the lawyers, who took something like 25% of the settlement for themselves.
dnr 7y ago
I got some stuff in the mail, and eventually two checks for the two phases. I think they were something like $1100 and $7000. I was kind of annoyed because the initial settlement was apparently so embarrassing that the _judge_ rejected it, something like $330M on supposedly $3B in lost wages. So they went back and increased it to the $435M, still nowhere close to what it should have been. Of course at this point the lawyers' incentives and the class' incentives are not aligned at all, so that's how it ended.

wyldfire 7y ago

> A separate class action lawsuit was filed on behalf of 64,000 tech workers for an estimated $3 billion in lost wages. Before the case went to trial, the companies settled for a total of $435 million. How would we know if they resumed the bad behavior?

rak00n 7y ago
That's only $6796.87 per person.
- dsfyu404ed 7y ago
  Depending on how much the mean/median person's base salary is that's on the order of a bonus. On one hand it's not that much. On the other hand I'd be pissed if I didn't get my bonus because of some back room deal between execs.
  - wyldfire 7y ago
    > that's on the order of a bonus It's likely far less, considering the fees paid to the law firm(s). ...and it's probably denominated in gift cards to the various companies' stores.
  - inlined 7y ago
    It’s not nearly the amount of an annual bonus, which is typically about 15% base pay. This is the order of a spot bonus (e.g. the director wants to thank you for working double time to make a product launch happen in time for a conference). Or it’s the price of 1-3 successful referrals to a company.
    - leesec 7y ago
      "It’s not nearly the amount of an annual bonus, which is typically about 15% base pay." Not in plenty of industries.

cliffy 7y ago

The settlement is laughable given the number of people whose salaries were held down as a result of this collusion. It's not just workers at these companies that suffer. It has a network effect of holding salaries down at companies which aren't even colluding. Another example of (usually giant) companies deciding to risk breaking the law because its cheaper in the long run to do so.

skybrian 7y ago
It was a long time ago. I got a raise out of it and later retired early, and I'm a pretty average software engineer, for Google anyway. Your argument that I "suffered" when actually they treated me very well by almost any standard isn't going to work. Based on what I've heard about current salaries for in-demand people, I think it's safe to say that any depressing effect on software engineers' salaries is long gone? And if not, and this is what holding down salaries looks like, imagine what the housing market would be like without it.
- cliffy 7y ago
  This reads like Stockholm Syndrome at its finest. You're OK with them paying you less because you still got paid well by some standard? You (and as a result many other people) would be making more both in the past and today if they hadn't colluded. For at least some subset of those affected by this collusion the salary lost will make a significant difference in their families' and their own quality of life either now or in the future.
  - ben_jones 7y ago
    It sounds like someone who made enough money to have their empathy towards others seriously diluted.
  - skybrian 7y ago
    It was never OK, but it was settled, they don't do that anymore, and besides, Steve Jobs (who apparently started it) is dead. And as for the people theoretically adversely affected, you'd have to figure out who they are, which wouldn't be easy, since it's people who were in demand enough that they might have started a bidding war. There is not much more justice to be had in this case. If you're interested in pursuing justice, why not focus on current problems with identifiable victims?

skybrian 7y ago

This happened but it's old news. I remember when they announced the raise we got as a result. If you never heard of it, you weren't affected.

DINKDINK 7y ago

I wonder how much small firms/startups have /benefited/ from this arrangement. By artificially reducing demand for labor, big tech firms have effectively made it more profitable for smaller firms to compete against them.

rightbyte 7y ago
I think you got it the other way around. They have decreased the price of labour and thus increased the demand for it. This is more or less an employer union.
- jorgemf 7y ago
  I don't get your point. As I understand it they have decreased the demand to decrease the price.
  - rightbyte 7y ago
    It's a approximately a zero sum game in the cartel. That was my point. If the price goes down the demand goes up. So the total demand for programmers increase (the demand for the other companies programmers decrease, of-course). It's a subjective matter of semantics, though.
- abvdasker 7y ago
  I prefer "buyer cartel". It sounds more sinister.
ummonk 7y ago
That, along with regulatory enforcement, was basically what broke the collusion scheme. Facebook as a growing company did not want to play ball, and aggressively poached from the other tech companies with bigger offers, forcing them to raise their compensation to retain employees.

paul7986 7y ago

Rules sooner or later will apply! They didn’t apply to Harvey Weinstein until they did!

deleted 7y ago

[deleted]

thorwasdfasdf 7y ago

It's interesting the lengths they'll go to rip off their own workers, and yet they won't even make the slightest effort to hire in locations where labor is much cheaper. There's countless places in the US where they could've fairly paid 1/3 less. And significantly more savings outside the US.

skybrian 7y ago
These companies have offices all over the world, including China and India.
chillacy 7y ago
A lot of companies have satellite offices in smaller cities with lower CoL. But they still want to be in urban centers with lots of people and next to strong CS colleges.

ChuckMcM 7y ago

The critical thing here is that if pay was uncontrolled, then skilled employees could market themselves to the highest payer, and that would put more of the profits of the work of those employees into employee pay instead of into company margin (aka profit). It is pretty clear when you look at the revenue per employee numbers at some of these 'digital product' companies (specifically Google and Facebook), that rank and file employees are not sharing equally with management in the returns. That is not to say that pay is bad, or that wage theft is going on (extreme positions), employees in California at least are at will and can quit at any time to offer their services to another player. The regulatory requirement though is to identify and prevent collusion between those players in keeping salaries low.

nathanvanfleet 7y ago
> That is not to say that pay is bad, or that wage theft is going on (extreme positions), employees in California at least are at will and can quit at any time to offer their services to another player. The regulatory requirement though is to identify and prevent collusion between those players in keeping salaries low. Wait, but isn't this situation actually making them getting hired at other players much more difficult due to the collusion?
- skybrian 7y ago
  It was not "much more difficult." They didn't have recruiters calling them, which I guess is market information of a sort.
  - mercutio2 7y ago
    This is the part of the whole internet-anger about this I've never understood. I hate having recruiters call me. It's actively annoying. Having only Facebook recruiters call me was strictly better than the alternative that all major tech company recruiters cold call me, which started happening right after this broke. I'm totally in favor of distributing more profits for all enterprises to workers, tech workers included, but "we agreed to not annoy one another's workers, but we're happy to hire when they apply" isn't really the story people tell. But that was my (and it sounds like your) experience of this.

matz1 7y ago

Employee compensation at these companies significantly tied to the stock price. So if these practice somehow outlawed, doesn't mean that company will have to spend more thus lower the stock price thus lower the employee compensation ?

deleted 7y ago

[deleted]

gok 7y ago

> Top executives of leading tech companies secretly agreed among themselves not to hire each other’s employees That's not accurate. The agreement was about recruiters cold-calling each other's employees. Employees were free to reach out on their own between companies. Workers routinely switched companies while the agreement was in effect. I still think it was bullshit, but it wasn't quite as egregious as the article makes it sound. Disclaimer: I was one of the affected employees, and got a share of the settlement.

elicash 7y ago
Recruitment is a vital part of the work companies do and they traditionally pour a ton of resources into that aspect of hiring. But yes, I agree specifying the deal was "limited" to recruitment hiring would be better and more precise. That shouldn't be used to diminish how vast of a deal this was. But I generally agree with you.
arebop 7y ago
Your statement is also not accurate, because there were several variants of "the agreement" and for some pairs of companies the agreement extended beyond cold-calling [https://www.lieffcabraser.com/antitrust/high-tech-employees/ https://www.lieffcabraser.com/antitrust/high-tech-employees/]. I'm sure multiple careers were set back when their prospective employer's HR department notified their current employer's HR department about the disloyalty.
- gok 7y ago
  Those allegations didn't have very strong evidence. They were repeated by some lawyers looking for people to opt out of the class action. When I asked for details they didn't have anything.
morganw 7y ago
A lot of the discovery was never redacted & released; it remains under seal. I think there was more going on like a courtesy "we're going to hire your person. You want us to turn them down & earn a chit for the future?".

splonk 7y ago

I was a member of the class and got a settlement. It's been quite some time so I don't recall the details exactly, but I think the settlement was divided through some combination of the amount of time you were employed through the time period in question, and maybe base salary or title? I would have been in the maximum bracket for time but probably pretty low in the salary/title spectrum as software engineers go. I think the amount I got was just under $7k. FWIW, I didn't feel particularly underpaid at the time, given that I was making way more than I'd ever had at any other point in my life, although I was relatively junior then and didn't have a good grip on the market. It ended up just being a bonus for essentially no effort on my part. I don't hold any major personal antipathy towards any part of the process.

nostrademons 7y ago

So I was at one of these companies when the scandal broke. I didn't get screwed quite so much as my coworkers, since I'd only been working there for a year or so. The settlement was a joke - I got about $1100, but my compensation increased by roughly $100K/year the year after the cartel broke, and kept rising. Can't say I'm terribly pleased about either the wage-fixing or the settlement, but... My wife works in philanthropy, and one of her jobs is investing in homeless shelters. We were talking the other day about how the Bay Area's housing/homelessness crisis is a direct consequence of the collapse of the high-tech wage-fixing cartel. Before 2010, the wage distribution from one of these huge companies was that founders and VCs would make billions, ~1000 early employees would end up with millions, and the rest of the employees live comfortable upper-middle-class lifestyles. The ~1000 employees who could cash out pre-IPO stock options would bid up prices in Hillsborough/Atherton/PacHeights/Woodside to ~$5M, but the rest of the Bay Area would be priced at what an ordinary professional could afford. After the cartel broke, the compensation structure changed so we have ~100K engineers each making ~$300-400K/year. That's enough to buy all the available housing inventory in the region. So now house prices in Mountain View and Sunnyvale go from $800K -> $2.4M, and you must be a dual-tech-income family to afford a house. I say this not to imply that the cartel was a good thing (cartels are bad, and I'd much rather the solution be greater wage equality for everyone and building more housing so everyone can stay in the area), but to highlight the problem of unintended consequences. I've seen many people ask "Why don't companies hire remote workers at Silicon Valley wages?" and in the same breath say "Because I would never move to the third-world hellhole that the Bay Area has become", not realizing that if they did hire remote workers, the same thing would happen in their communities. Inflation is the flip side of higher wages; when everybody gets paid more, everything costs more.

chillacy 7y ago
Just a nit: Inflation is the result of too much money chasing too few goods, so not everything increases in price. Electronics and mass consumer goods typically stay the same price. Only goods which have limited supply and no substitution get more expensive, like housing. Otherwise everything else makes sense.
- 7y ago

bvd 7y ago

I really think that this is crazy. I mean, that they did these kinds of agreements and actually thought they wouldn't get caught.

SupperMonty 7y ago

Silicon Valley companies are really interesting sometimes for entertainment value mostly. I doubt we are going to see any great progress coming out of that place - except maybe more spying and the like. I don't know if you noticed those badges the drones there usually carry with a phone number, where you can report "inappropriate conduct". For some reason I had this image in my mind about someone calling to ask if it was okay to eat a ham sandwich, if one of your colleagues was a muslim and those people operating those phone lines would then have morning standups, where they would discuss such important issues. So I was minding my own business one day doing what I do and suddenly get called upon by the big man to explain why I was a jew hater. Apparently someone had picked up that I had made a comment about jews at some point. I may or may not have made a sarcastic joke about some news story involving one or two jews. No idea, but being a bit autistic and odd person in general, that may have happened. Its not like I burned a Quran or something like that, but... I made an attempt at explaining how that didn't make any sense, since I was a jew myself and had even lived in Israel as a child. Apparently that didn't really make a difference. The machinery had been set in motion and I had been stamped as incompatible with Apple values. I tend to agree with that..

JTbane 7y ago

IMO, there ought to be a law that makes it easier to pierce the corporate veil in these sorts of cases.

tbarbugli 7y ago

> estimated $3 billion in lost wages. Before the case went to trial, the companies settled for a total of $435 million So you get busted doing something illegal and walk away with a 2.5Billion in your pocket and 0 jail time. How do you expect execs to not do this all the time?

khalilravanna 7y ago
If the number of 64,000 employees is correct, even that $3B seems like a pittance. One commenter wrote their wage jumped by $100k the year after this settlement. $3B / 64k ~= $50k per person, less than half that number[1]. In the end they only had to pay an amount that was < $7k per person. What a joke. My guess is the executives who orchestrated this got a big bonus as a result. And why wouldn't they? They optimized for the corporation's good. How do we collectively start incentivizing not being evil like this? 1. Sure it's only one data point to extrapolate off of but anecdotally hearing that people were paid $100-150k in SF while this was going on is a substantial amount of wage suppression given that those same people employed now would be making $300-500k at those same companies without blinking an eye.
- hopler 7y ago
  It was orchestrated by CEOs. They get big bonuses regardless. Also you are conflating base salary with total comp in your example.
  - khalilravanna 7y ago
    A fair point about CEOs but the leaders of engineering had to sign off on this all along the way. Of course my math is back of the envelope and nothing to go by but it definitely hints at the massive discrepancy. To your point about salary/comp, Netflix is at least one example of a company that allows (allowed?) comp in the form of 100% salary.
skybrian 7y ago
We are talking about a hypothetical wage calculation with many unknowns versus a cash settlement. In truth, nobody knows what would have happened in the counterfactual case, but settlements require picking a number.

yonran 7y ago

I think the tech anti-poaching lawsuit is kind of a strange case because these are the highly-paid employees, not entry-level laborers, and the free market for top employees is likely to increase inequality, which is sort of the opposite of the goal of the Sherman Act. It’s similar to how collusion in the NBA reduces wages at the top while increasing team profits as well as enabling higher wages at the bottom (sports teams are excluded from the Sherman antitrust act), making a more viable ecosystem (see Planet Money episode https://www.npr.org/sections/money/2018/07/11/628137929/episode-427-lebron-james-is-still-underpaid https://www.npr.org/sections/money/2018/07/11/628137929/epis...). So it’s possible that forcing a free market of top employees will increase wage inequality. And ironically, politicians now complain that these tech companies are paying too much, driving up the rent of housing (thanks to the region’s restricted housing supply), since the lack of housing channels high wages into the pockets of landlords. How should the Bay Area economy have grown in the past decade if we had wanted to prevent the poverty created by tech and landlord wealth? We should have allowed far more housing supply, allowing apartments to bid down rents and also allowing new workers to bid down wages. We should have had higher taxes on land, allowing the poor to share the wealth created by the increasing concentration of employment centers. And we should have had higher national income taxes, spreading the wealth from the highest-paid workers in the winners-take-all economy to the rest. But given the dysfunctional local government (restrictive zoning), dysfunctional state government (Proposition 13), and dysfunctional national government (low top tiers and low taxes on homeowner rents), the collusion that the tech companies did was not clearly a bad thing. The Sherman Act is about enabling the price signal to be the “central nervous system of the economy” (U.S. v. Socony-Vacuum Oil Co) to mobilize labor and capital. But when the dominant factor in the labor market is local governments’ restrictions on the housing supply which prevent mobility, I don’t see much point in enforcing the antitrust act against companies.

john_jr_smith 7y ago

This was replaced by all big tech companies matching market rates. Google pays 90-95 percentile of the market. Apple pays 90-95 percentile of market. They reevaluate each year. But since they are the biggest, highest paying ones, the increase in salaries is minimal. Consider: From 2013 to 2018, Google's revenue rose 2.5x. Google's employee count rose 1.8x. Google's salaries did not rise 33%. You might argue that there is more supply, but that's extremely unlikely. CS degree graduations rose single digit percent (if at all), and graduates make a small portion of the total working force. The same calculation I'd expect to hold for any of the big five companies.

yeahitslikethat 7y ago

I can't reconcile how anyone with integrity would work at these firms. Which then it follows that only people without integrity work at these firms. Now it all makes sense.

ngcc_hk 7y ago

669 ...

benologist 7y ago

These companies still routinely conspire against their own workers to slightly increase profits by reducing benefits, salaried roles, sick pay etc.

Nevermark 7y ago
And employees conspire to get more by gaining experience then moving to other companies, differentiating themselves and asking for raises? You are describing negotiation. Companies are not supposed to want to raise wages any more than employees are supposed to want to lower wages. The balance is how the market puts a value on different kinds of work and skills.
- benologist 7y ago
  Sometimes it's a negotiation between parties each with some measure of power, but it can also be completely unilateral like using layoffs and redundancies and shutdowns and bankruptcies as an accounting tool and not necessarily because they're losing money or making strategic changes.

scottlegrand2 7y ago

I think the latest expression of this concept came out when a friend of mine was up for a senior role at Google and they ended consideration when they suddenly decided that he switched jobs too often to be a leader, but they were happy to continue considering him for a role beneath what he currently already had.

Nevermark 7y ago
Isn't that a reasonable concern? The decision is specific to that one candidate and related directly to the candidates work history. Is there no N, where N is the number of jobs someone has had in the last five years, where you would consider someone to be a questionable candidate for a key position?

briantakita 7y ago

Powerful people colluding? Sounds like one of those "conspiracy theories"</sarc> Given how these large companies have a penchant to buy a promising company just to kill the product a couple years later, it seems like it's in the market's best interest to encourage distribution of power. This includes encouraging entrepreneurship with technologists & incentives to grow individual businesses to profitability, while discouraging M & A.

acdc4life 7y ago

“A separate class action lawsuit was filed on behalf of 64,000 tech workers for an estimated $3 billion in lost wages.“ So they went through all this effort to save 3 billion/64000 = $46,875 per employee. Is that how it should be interpreted? If so, these executives are greedy scum.

Proven 7y ago

I like that because it increases my own chances of getting a job at FANG.