> Meg called to talk about our hiring practices. Here is what she said. Google is the talk of the valley because we are driving salaries up across the board.
Then Eric Schmidt says:
> I would prefer Omid do it verbally since I don't want to create a paper trail over which we can be sued later
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.
Then Eric Schmidt says: > I would prefer Omid do it verbally since I don't want to create a paper trail over which we can be sued later
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?
Colluding to hold down wages is terrible and I hope they get in a lot of trouble for it. But this doesn't follow:
> 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).
It's all propaganda. There's no engineering shortage. They're all just trying to flood the market with more engineers from all around the world.
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.
This is prima facie collusion and corruption. These executives should be fired and prosecuted for fraud and collusion. If it doesn't happen, it means our society endorses corruption and encourages this, and we'll see more bad behavior.
A developer is pretty well paid when compared to other professions regardless of the price fixing scheme. I'm not sure fixed pricing and developer shortage are linked.
The income and standard of living for software engineers in Silicon Valley is so high that low wages are not the constraining factor in engineer population.
Why do we keep bringing up these issues as if they were mutually exclusive?
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.
Read the policy. It's basically against poaching executives. It specifically says that anyone at the individual contributor level (ie developers, designers, testers) are all fair game. At the executive level for these places, salaraies are probably $300K-$30M range. I feel like depressing their wages isn't a pressing issue for this country.
In your rush to bash illegally-colluding tech execs for the engineer shortage you seem to have missed the end of the article where the policy is posted. From that document:
"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.
This is an interesting fight to watch from here on the sidelines, given that many employees were colluding to drive up wages - here on HN, we had people boasting about having a stable job, then hearing about a job at another BigNameCo, and applying for it just to drive up their own wage. No intention of leaving their own company, and that it was turning into a routine process rather than the odd here-and-there.
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.
This is appalling to read, and it's frightening how blasé they are about blatantly illegal and unethical non-competition. Yet, I think the article misrepresents Schmidt firing the recruiter:
>Here, Schmidt relates a phone call he had with eBay CEO Meg Whitman and then orders his own recruiter to be fired because that person tried to poach the COO of eBay.
Reading the email, it doesn't seem like the recruiter was fired for trying to poach the COO; it seem like he was fired for lying to the target about the position (as Schmidt calls them, "falsehoods"). Don't forget recruiters usually get a significant finder's fee, and are not above misrepresenting a position to generate interest.
Ah... So it was always "Be Evil" and fuck over your employees. It always amazes me that these people love free markets, until it's expensive and then they break the law deliberately to pay slightly less than the fair market price to the best and brightest.
Effectively stealing from their employees to give to their shareholders just blows my mind.
It's important to not gloss over Apple's role in this. Based on the emails that I have seen, they were the driving force behind these agreements.
Yes, Google's "don't be evil" mantra is tempting low hanging fruit. They dropped the ball here, but so did most of the valley. Nobody should be getting free passes in the court of public opinion.
Just gonna throw my perspective out there, since I was a firsthand witness to this stuff.
I started at Google in 2005 as an ordinary software engineer, and I've not yet left them. Back then, Google recruiters were constantly bugging employees for referrals. But this "no poaching" thing wasn't some weird dirty secret among execs -- it was just sort of a common knowledge thing, and nobody seemed to think it was a big deal. "Oh, we have a gentleman's agreement with Apple not to poach them and vice versa -- so give us the names of your friends to reach out to, but not if they already work at Apple."
AFAICT, the reason I (and my coworkers) never thought of this policy as illegal is probably for two reasons:
1. Hey, poaching back and forth would create a lot of disruption and churn and mess up both companies' ability to get things done. Let's not start a pointless war.
2. We, as programmers, are ridiculously overpaid already. How could anyone possibly be "taking advantage" of us at these salaries? The notion seemed as absurd as a Programmer's Labor Union!
Again, the idea was not to poach, not to avoid hiring. If somebody from Apple applied for a Google job of their own will, that was fine.
In hindsight, I /guess/ I understand how this looks like evil collusion to keep salaries down... but really it seemed like common sense and civility at the time. At least that's how it was sold to us. It was sort of like the nuclear policy of Mutually Assured Destruction: "the only way to win is not to play." It's the same attitude that still explains why giant companies don't (typically) begin patent wars -- there's no point if everyone ends up destroying each other.
I worked there as well. The problem is that the kind of selective agreements are a form of market collusion that is enshrined as illegal in anti trust law. So even if it "makes sense" it also infers with market dynamics.
Finally, the notion that this was an individual thing and there were no class impact is not so. The reason is that these companies have "brackets" for pay. If you are at a certain job title you make $X - $Y and corresponding amounts for options etc. These companies are also very interested in equity among the employees so if prices start rising they will have to draw up the low end affecting prices across the board.
To the doubters, I point to the Facebook/google incident. Google was forced to give across the board 10% raises to every single employee because Facebook wasn't willing to sign anti poaching agreements.
It's interesting that arguments essentially from das kapital are being raised here. Wages vs productivity. Intrinsic ideas of fairness are universal (and possible primate, studies showed).
> We, as programmers, are ridiculously overpaid already. How could anyone possibly be "taking advantage" of us at these salaries?
Overpaid by what metric? Compared to society at large, you make a lot money, yes, but you're also contributing significantly to one of the most profitable companies in the world. Google has a profit of about a million dollars per employee per year; why aren't you capturing more of that? [1]
If you're not taking that money home, someone else is. What do you bet those people are the ones telling you this is all in the name of civility?
Just because you and 'some' of your coworkers thought programmers are 'ridiculously overpaid' doesn't mean all of your coworkers felt that way. As such, the suit is just that, for those other employees that felt gipped.
The way your leverage mutually assured destruction here is just sugar coating the very nature of collusion like the telecomm companies. When no one lowers prices and compete fairly, the customers (and by analogy the programmers) loses out. So it doesn't just /look/ like evil collusion because it /is/ evil collusion.
I just wanted to clarify to anyone reading this passage here.
"Google is the talk of the valley because we are driving salaries up across the board." "I would prefer Omid do it verbally since I don't want to create a paper trail over which we can be sued later"
It's evil collusion to keep salaries down.
Not discussing your compensation is another example of something we've been sold on as "common sense and civility" though it's illegal to restrict it.
The collusion allegations sound serious, but I believe the pando.com article has a couple misunderstandings and is overly sensationalist:
1. It is not illegal for a company to have its own “Do Not Cold Call” list. If you know that poaching your allies’ employees is likely to jeopardize the joint projects, you may choose not to poach your allies’ employees. If you know that poaching your competitor’s employees will likely provoke them to poach your own employees, you may both choose to avoid the mutually assured destruction. As far as I know, it is only illegal to collude with your competitor to make such a list. But it appears that Google did have illegal agreements.
2. One of the quotes from a Google memo, “Most companies have non-solicit agreements which would limit or prohibit a candidate from asking a coworker to interview with us as well,” appears to have nothing to do with anticompetitive behavior. Instead, it probably refers to non-solicit agreements that employees often must agree to when joining a company that prohibit the employee from poaching one of their coworkers for a time after leaving the company. The memo warns not to pressure employees to violate contracts they have signed with their prior employers.
Interesting choice of subjects in the headline. I see that Saint Steven's reputation is still off-limits. My reading of the first two emails is that Jobs was a raging asshole in every facet of life and business.
The same way the SEC opens insider trading investigations based solely on market data - eg. unusual volume of transaction preceding a major unplanned announcement - a government body should mine employment data from LinkedIn for example and investigate cases where there are very few employees switching jobs between large corporations.
This is even more unsettling when you realize that Google, Apple and such have employees that generate revenue in the range of a million dollar per head yet pay a average salary that is 10-20% of that. They end up with absurdly large piles of cash that banks and financial institutions never see because they compensate their employees more fairly.
I have to say, the only person that disappoints me in all of this is Sergey Brin. I guess I kind of expected everybody else to be a douche, but he's fostered this free-thinking Tony Stark/Ironman persona and this just makes him seem like a coward, who caved the instant Steve Jobs came-a-ranting.
As I understand it, they were still allowed to hire from each other, they just agreed not to poach employees from each other. That doesn't sound so unreasonable to me.
I'm not very knowledgable of this sort of thing -- what have other professions historically done to mitigate this sort of thing? Unions? Licensing boards?
I find this agreement and the Facebook sponsored stories feature baffling. They remind me of when Korean companies have gotten caught up in price fixing and invoked the excuse "we had no idea this would be illegal!"
Like many of you I am one of the engineers that's covered by the suit and may stand to benefit from it.
Having said that, I want to play devil's advocate for a second. It's just my natural reaction when the press embeds big unquestioned assumptions in reporting for the sake of sensationalism -- namely that this is obviously "illegal" and nefarious behavior. Because, after all, it kept down wages for people like me who might otherwise have been more actively recruited.
If your reaction is OF COURSE IT'S ILLEGAL, just hold on a second. Try to think about the counterargument rationally, even if it's against your personal interests. (That's what I'm doing.)
There do exist many precedents for agreements and restrictions on seemingly "competitive" behavior that is deemed "unfair".
Let's consider a related example from another domain: countries "dumping" cheap goods into foreign markets. For example, China is accused of "dumping" subsidized steel into the U.S. market, which hurts the industry here. The U.S. steel industry works with the government to put in place tariffs that block the practice.
So is the U.S. steel industry being anti-competitive here? Have they engaged in an anti-competitive pact with the U.S. government conspiring to keep up the price of steel here?
Well, on the surface, yes they have. But the distinction is that "dumping" is meant to describe a particular form of competition that is short term and unsustainable in nature and designed primarily to destroy competing business. It is meant to isolate a specific practice that actually hurts competition in the long run.
So, what about the practice of poaching employees from competitors? Well think about it for a minute.
What is the value of a Safari engineer to Google's nascent Chrome team? The truth is, it's a lot more than just that engineer's skillset. There's also the value of undercutting Apple's Safari development. That's HUGELY valuable to a competitor.
So, I just wanted to put it out there that at first blush at least, that the practice of "poaching" may actually have an anticompetitive angle. Just like with "dumping", you have to look beyond the immediate act (restricting/boosting prices) and examine the particular practice it's attempting to curtail.
This is real theft. I applaud my free market overlords for such setting fine examples of Machiavellin psychopathy and systematic duplicity, where they on the one hand lament the "shortage" of engineers and the failure of the education system, whilst simultaneously depressing the wages that should have been demanded from the fruits of that self same system.
Not sure why this is ruffling so many feathers. There are thousands of great tech companys to work for that aren't on any Google, Apple or EBay "no-hire" list and vice versa. I fail to see how a few big companys agreeing not to poach talent from each other artificially reduces the total compensation ceiling industry wide.
Since our employers are clearly not above playing juvenile dirty tricks, what's to stop us engineers returning the favor?
Other professions (Doctors, Lawyers) use legislation to restrict the supply of labor and drive up prices, so why should software engineers be any different? We currently make ourselves vulnerable to manipulation and abuse in a way that no other profession has been stupid enough to do for centuries.
We should lobby aggressively for legislation requiring professional accreditation for practicing software engineers, as well as for the provision of training and documentation services. We need to shut down the technical MOOCs, as well as efforts like stack overflow and code academy. All of these things, whilst seemingly noble, do our profession grievous harm.
The behavior seems slimy (otherwise there'd be no need to be all cloak-and-dagger about it), but the interpretation seems sensationalist (Pando: "Price Fixing!"). As far as I can tell from the evidence, this was a 'no cold call' agreement, not an agreement not to hire people who apply or to set their wages, perhaps with the exception of high level managers or executives, most of whom, if they wanted to demand higher salary, could leak or threaten to leave for another company, and who are often under other constraints. In fact, it's not even clear this is about wages per say, but the disruption that comes from breaking up team and concerns over intellectual property/trade secrets leaking.
I'd be pissed if I applied for another job and was turned down purely because of my previous employer. But I'm not phased by avoiding cold calls. I still get loads of emails trying to recruit me and they're mostly annoying. If I decide to switch jobs, it'll be because I initiate it, not because of HR reps phoning me.
If you were around during the last dot-com boom, you may remember the ridiculous poaching that went on, startups offering insane signing bonuses and other perks, employees changing jobs after only a few months on the job. I worked for a company once that had $100+ million in Softbank funding, and funneled a huge amount of it through headhunters which received a bounty on each hire, and were incentived to bribe prospects to quit their current job.
I'm not sure this is healthy for the industry as a whole. There's already an apparent bubble in asset prices and cost of living in the Bay Area, and while it seems good for some tech workers in the short term to have salaries pumped through the roof, I'm not sure it's good for the overall tech economy, or the economy in general.
I'm somewhat sympathetic to the notion that companies want to avoid aggressive and invasive poaching on each other's workforces, it could turn into mutually assured destruction. If I had a startup, I'd be pissed of someone came along (and poached my employees instead of an acqui-hire) that I spent significant amounts of resources recruiting and training.
To read some of the press articles, you'd think this was the Grapes of Wrath or something, that poor tech workers, the ones who drive around in luxury busses and pay $3000-5000/mo for studio apartments in SF, are woefully under compensated. I wonder if this was a story about Goldman Sachs and JP Morgan conspiring to keep down the compensation of Wall Street money managers through no poach agreements, we'd have the same coverage.
Here's analogy. Let's say there is an employee marketplace. Employers list jobs for offer and salary. Employees list skills, availability, and asking salary. If the employers don't conspire to artificially restrict the offers and salary prices listed, would we say this is a competitive market with no price fixing?
Ok, now let's say that besides listing the jobs and prices, Employers activity solicit buyers. With stocks regulated because of issues (http://www.sec.gov/answers/cold.htm). But let's say employers cold call the employees and tell them to 'buy' a particular offer. Then at some point, the companies cease using sales forces to go out and cold call people to buy these offers. Instead, employees must come to the market of their own accord and bid on them. Is this really price fixing?
If all brokers stopped calling you trying to get you to "Buy XYZW", you wouldn't consider them trying to manipulate the price of XYWZ.
[+] [-] firstOrder|12 years ago|reply
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.
[+] [-] CamperBob2|12 years ago|reply
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?
[+] [-] icambron|12 years ago|reply
> 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).
[+] [-] Vardhan|12 years ago|reply
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.
[+] [-] late2part|12 years ago|reply
[+] [-] samstave|12 years ago|reply
Don't be fooled by altruistic PR coming from Zuck and others...
[+] [-] nova22033|12 years ago|reply
[+] [-] zimbatm|12 years ago|reply
[+] [-] philwelch|12 years ago|reply
[+] [-] bowlofpetunias|12 years ago|reply
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.
[+] [-] tootie|12 years ago|reply
[+] [-] stanleydrew|12 years ago|reply
"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.
[+] [-] vacri|12 years ago|reply
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.
[+] [-] peeters|12 years ago|reply
>Here, Schmidt relates a phone call he had with eBay CEO Meg Whitman and then orders his own recruiter to be fired because that person tried to poach the COO of eBay.
Reading the email, it doesn't seem like the recruiter was fired for trying to poach the COO; it seem like he was fired for lying to the target about the position (as Schmidt calls them, "falsehoods"). Don't forget recruiters usually get a significant finder's fee, and are not above misrepresenting a position to generate interest.
[+] [-] andy_ppp|12 years ago|reply
Effectively stealing from their employees to give to their shareholders just blows my mind.
[+] [-] doktrin|12 years ago|reply
Yes, Google's "don't be evil" mantra is tempting low hanging fruit. They dropped the ball here, but so did most of the valley. Nobody should be getting free passes in the court of public opinion.
[+] [-] zaxxon|12 years ago|reply
I started at Google in 2005 as an ordinary software engineer, and I've not yet left them. Back then, Google recruiters were constantly bugging employees for referrals. But this "no poaching" thing wasn't some weird dirty secret among execs -- it was just sort of a common knowledge thing, and nobody seemed to think it was a big deal. "Oh, we have a gentleman's agreement with Apple not to poach them and vice versa -- so give us the names of your friends to reach out to, but not if they already work at Apple."
AFAICT, the reason I (and my coworkers) never thought of this policy as illegal is probably for two reasons:
1. Hey, poaching back and forth would create a lot of disruption and churn and mess up both companies' ability to get things done. Let's not start a pointless war.
2. We, as programmers, are ridiculously overpaid already. How could anyone possibly be "taking advantage" of us at these salaries? The notion seemed as absurd as a Programmer's Labor Union!
Again, the idea was not to poach, not to avoid hiring. If somebody from Apple applied for a Google job of their own will, that was fine.
In hindsight, I /guess/ I understand how this looks like evil collusion to keep salaries down... but really it seemed like common sense and civility at the time. At least that's how it was sold to us. It was sort of like the nuclear policy of Mutually Assured Destruction: "the only way to win is not to play." It's the same attitude that still explains why giant companies don't (typically) begin patent wars -- there's no point if everyone ends up destroying each other.
[+] [-] ryanobjc|12 years ago|reply
Finally, the notion that this was an individual thing and there were no class impact is not so. The reason is that these companies have "brackets" for pay. If you are at a certain job title you make $X - $Y and corresponding amounts for options etc. These companies are also very interested in equity among the employees so if prices start rising they will have to draw up the low end affecting prices across the board.
To the doubters, I point to the Facebook/google incident. Google was forced to give across the board 10% raises to every single employee because Facebook wasn't willing to sign anti poaching agreements.
It's interesting that arguments essentially from das kapital are being raised here. Wages vs productivity. Intrinsic ideas of fairness are universal (and possible primate, studies showed).
Google is in a weak position here.
[+] [-] icambron|12 years ago|reply
> We, as programmers, are ridiculously overpaid already. How could anyone possibly be "taking advantage" of us at these salaries?
Overpaid by what metric? Compared to society at large, you make a lot money, yes, but you're also contributing significantly to one of the most profitable companies in the world. Google has a profit of about a million dollars per employee per year; why aren't you capturing more of that? [1]
If you're not taking that money home, someone else is. What do you bet those people are the ones telling you this is all in the name of civility?
[1] E.g. https://signalvnoise.com/posts/2283-ranking-tech-companies-b... I confess I don't know the numbers for 2005, but it should be easy to look up.
[+] [-] esturk|12 years ago|reply
The way your leverage mutually assured destruction here is just sugar coating the very nature of collusion like the telecomm companies. When no one lowers prices and compete fairly, the customers (and by analogy the programmers) loses out. So it doesn't just /look/ like evil collusion because it /is/ evil collusion.
I just wanted to clarify to anyone reading this passage here.
[+] [-] nerfhammer|12 years ago|reply
It's evil collusion to keep salaries down.
Not discussing your compensation is another example of something we've been sold on as "common sense and civility" though it's illegal to restrict it.
[+] [-] methodover|12 years ago|reply
This must not have been true, if collusion was necessary to keep wages down.
[+] [-] yonran|12 years ago|reply
1. It is not illegal for a company to have its own “Do Not Cold Call” list. If you know that poaching your allies’ employees is likely to jeopardize the joint projects, you may choose not to poach your allies’ employees. If you know that poaching your competitor’s employees will likely provoke them to poach your own employees, you may both choose to avoid the mutually assured destruction. As far as I know, it is only illegal to collude with your competitor to make such a list. But it appears that Google did have illegal agreements.
2. One of the quotes from a Google memo, “Most companies have non-solicit agreements which would limit or prohibit a candidate from asking a coworker to interview with us as well,” appears to have nothing to do with anticompetitive behavior. Instead, it probably refers to non-solicit agreements that employees often must agree to when joining a company that prohibit the employee from poaching one of their coworkers for a time after leaving the company. The memo warns not to pressure employees to violate contracts they have signed with their prior employers.
[+] [-] thrownaway2424|12 years ago|reply
[+] [-] ucha|12 years ago|reply
This is even more unsettling when you realize that Google, Apple and such have employees that generate revenue in the range of a million dollar per head yet pay a average salary that is 10-20% of that. They end up with absurdly large piles of cash that banks and financial institutions never see because they compensate their employees more fairly.
[+] [-] fatjokes|12 years ago|reply
[+] [-] unfamiliar|12 years ago|reply
[+] [-] gamegoblin|12 years ago|reply
[+] [-] rayiner|12 years ago|reply
I find this agreement and the Facebook sponsored stories feature baffling. They remind me of when Korean companies have gotten caught up in price fixing and invoked the excuse "we had no idea this would be illegal!"
[+] [-] pjc50|12 years ago|reply
[+] [-] htk|12 years ago|reply
[+] [-] briantakita|12 years ago|reply
[+] [-] abalone|12 years ago|reply
Having said that, I want to play devil's advocate for a second. It's just my natural reaction when the press embeds big unquestioned assumptions in reporting for the sake of sensationalism -- namely that this is obviously "illegal" and nefarious behavior. Because, after all, it kept down wages for people like me who might otherwise have been more actively recruited.
If your reaction is OF COURSE IT'S ILLEGAL, just hold on a second. Try to think about the counterargument rationally, even if it's against your personal interests. (That's what I'm doing.)
There do exist many precedents for agreements and restrictions on seemingly "competitive" behavior that is deemed "unfair".
Let's consider a related example from another domain: countries "dumping" cheap goods into foreign markets. For example, China is accused of "dumping" subsidized steel into the U.S. market, which hurts the industry here. The U.S. steel industry works with the government to put in place tariffs that block the practice.
So is the U.S. steel industry being anti-competitive here? Have they engaged in an anti-competitive pact with the U.S. government conspiring to keep up the price of steel here?
Well, on the surface, yes they have. But the distinction is that "dumping" is meant to describe a particular form of competition that is short term and unsustainable in nature and designed primarily to destroy competing business. It is meant to isolate a specific practice that actually hurts competition in the long run.
So, what about the practice of poaching employees from competitors? Well think about it for a minute.
What is the value of a Safari engineer to Google's nascent Chrome team? The truth is, it's a lot more than just that engineer's skillset. There's also the value of undercutting Apple's Safari development. That's HUGELY valuable to a competitor.
So, I just wanted to put it out there that at first blush at least, that the practice of "poaching" may actually have an anticompetitive angle. Just like with "dumping", you have to look beyond the immediate act (restricting/boosting prices) and examine the particular practice it's attempting to curtail.
[+] [-] confluence|12 years ago|reply
Fuck. These. Assholes.
[+] [-] aaronbrethorst|12 years ago|reply
"[I]s you taking notes on a criminal fucking conspiracy?"
Setting aside issues of ethics and legality, I cannot believe that any of these people would ever commit any of this to electronic record.
[+] [-] yuhong|12 years ago|reply
I still remember a HN thread which suggested that Larry/Sergey fire Eric Schmidt for this: https://news.ycombinator.com/item?id=3523513
[+] [-] briantakita|12 years ago|reply
[+] [-] ForHackernews|12 years ago|reply
> he was sure we were building a browser and were trying to get the Safari team
Well he wasn't wrong...
When did work start on Chrome? First release was in 2008.
[+] [-] kaonashi|12 years ago|reply
[+] [-] naveenspark|12 years ago|reply
[+] [-] skaevola|12 years ago|reply
http://pando.com/2014/03/22/revealed-apple-and-googles-wage-...
[+] [-] w_t_payne|12 years ago|reply
Other professions (Doctors, Lawyers) use legislation to restrict the supply of labor and drive up prices, so why should software engineers be any different? We currently make ourselves vulnerable to manipulation and abuse in a way that no other profession has been stupid enough to do for centuries.
We should lobby aggressively for legislation requiring professional accreditation for practicing software engineers, as well as for the provision of training and documentation services. We need to shut down the technical MOOCs, as well as efforts like stack overflow and code academy. All of these things, whilst seemingly noble, do our profession grievous harm.
[+] [-] cromwellian|12 years ago|reply
I'd be pissed if I applied for another job and was turned down purely because of my previous employer. But I'm not phased by avoiding cold calls. I still get loads of emails trying to recruit me and they're mostly annoying. If I decide to switch jobs, it'll be because I initiate it, not because of HR reps phoning me.
If you were around during the last dot-com boom, you may remember the ridiculous poaching that went on, startups offering insane signing bonuses and other perks, employees changing jobs after only a few months on the job. I worked for a company once that had $100+ million in Softbank funding, and funneled a huge amount of it through headhunters which received a bounty on each hire, and were incentived to bribe prospects to quit their current job.
I'm not sure this is healthy for the industry as a whole. There's already an apparent bubble in asset prices and cost of living in the Bay Area, and while it seems good for some tech workers in the short term to have salaries pumped through the roof, I'm not sure it's good for the overall tech economy, or the economy in general.
I'm somewhat sympathetic to the notion that companies want to avoid aggressive and invasive poaching on each other's workforces, it could turn into mutually assured destruction. If I had a startup, I'd be pissed of someone came along (and poached my employees instead of an acqui-hire) that I spent significant amounts of resources recruiting and training.
To read some of the press articles, you'd think this was the Grapes of Wrath or something, that poor tech workers, the ones who drive around in luxury busses and pay $3000-5000/mo for studio apartments in SF, are woefully under compensated. I wonder if this was a story about Goldman Sachs and JP Morgan conspiring to keep down the compensation of Wall Street money managers through no poach agreements, we'd have the same coverage.
Here's analogy. Let's say there is an employee marketplace. Employers list jobs for offer and salary. Employees list skills, availability, and asking salary. If the employers don't conspire to artificially restrict the offers and salary prices listed, would we say this is a competitive market with no price fixing?
Ok, now let's say that besides listing the jobs and prices, Employers activity solicit buyers. With stocks regulated because of issues (http://www.sec.gov/answers/cold.htm). But let's say employers cold call the employees and tell them to 'buy' a particular offer. Then at some point, the companies cease using sales forces to go out and cold call people to buy these offers. Instead, employees must come to the market of their own accord and bid on them. Is this really price fixing?
If all brokers stopped calling you trying to get you to "Buy XYZW", you wouldn't consider them trying to manipulate the price of XYWZ.