The companies have argued to the government that there's nothing anticompetitive about the no-poaching agreements. They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer.
Some economists believe that banning such agreements could harm Silicon Valley's open, collaborative model.
If the existence of an agreement isn't disclosed to the employees, then the model is not really what it is always held out to be, but something more akin to private industrial policy. I don't believe this is any better for consumers than for employees over any length of time. I've personally felt (as a consumer) that tech & internet development have stagnated in the last year or two, notwithstanding the existence of new things; perhaps this is why.
Settlement or litigation, this is probably going to set off a wave of cross-hiring because firms will no longer have the security of the agreement in place when negotiating employment agreements, and turning away a candidate from another firm with good skills may look suspicious. Good for engineers, good for the local economy, probably good for innovation; not so good for CFOs and CIOs who like sleeping at night.
I'm guessing companies will settle rather than fight; but if not, it'll set off a sector-wide feeding frenzy in the market. This should make the rest of the year interesting. It's partly political, to be sure, but slow wage growth in a period of generally rising productivity per capita has been a source of discontent for quite a while now. There is a lot of pent-up frustration, and also a lot of companies sitting on cash reserves in search of a market signal; neither situation is sustainable.
Incidentally, Microsoft, IBM and Genentech are all said to be in the clear.
This definitely should be disclosed to the employee. From my understanding, it would make it difficult to get a job at Apple if you accept an offer at Intel. Basically, this closes doors for you, and makes a job offer at Intel less valuable.
I've personally felt (as a consumer) that tech & internet development have stagnated in the last year or two, notwithstanding the existence of new things.
Oh, sorry! I meant that some people are innovating, but that the overall trend has been towards sameness and value extraction. Many superficially novel offerings are only stylistically different.
It's hard to articulate; I feel like I've seen the pattern before at least twice, and soon after there's a game-changing disruption. The two previous instances would the browser and web services. This time? Adaptive structural decomposition.
No, though it's that sort of thing. I came up with the term because it seemed to describe the key process at work in future software - at least, the kind which I expect/hope to see - and which depends on a sort of weak AI.
It needs an essay-length answer, and I'm not quite ready to do it yet. And at that, it's conceptual, addressing my subjective view of content/interaction problems in different domains, and my equally subjective view that they're isomorphic to some other technical problems for which we have or are converging on solutions. Some might find it aggressively different, others a handwaving restatement of ideas that already exist. I don't want to be a tease, so rather than saying more I'll start making notes this weekend.
> I meant that some people are innovating, but that the overall trend has been towards sameness and value extraction. Many superficially novel offerings are only stylistically different.
I think you're half-right, but the most exciting thing happening right now in technology are some of the expensive cool technologies turning into commodities. This doesn't have the "wow!" factor of new breakthroughs, but is an important step. Soon-ish (10 years?) everyone will own a smartphone, which means a computer in your pocket. That's pretty cool. Also, the mobile web stuff is pretty cool, and the ability to get high end scalable cloud hosting for relatively cheap is cool.
These aren't major breakthroughs the way social news was, the way better search was, the way better email was, etc. I do see less of those, but new competition and collapsing prices in cool technologies is a really good thing, even though it doesn't set off the wow factor so much.
I think the poster above is suggesting that the new things, though extant, are not sufficiently many/various/innovative/useful/delightful to constitute satisfying progress.
In many states, non-compete agreements are enforceable. In CA, they aren't worth the paper they are written on.
If CA courts had held non-compete agreements to be enforceable, "Silicon Valley" never would have happened as the free flow of technical expertise never would have happened.
These companies are trying to bypass the legal system by conspiring to make their own arrangement of "non compete agreements" without the knowledge or consent of the workers.
There's been some interesting research on that in airline fares. Airlines are pretty careful these days not to engage in any private collusion, but they have quite complex dances of intention-signalling via their fare raises/decreases, their pre-announcements of those fare changes, their press conferences at which they discuss what they might do in the future (and what actions by their competitors might influence them one way or another), etc.
The goal is to avoid price wars and maintain some sort of soft price-fixing, but to do it all entirely publicly without direct discussions. It's not as blatant anymore as it used to be, but at its height (until some 1990s lawsuits), they were effectively conveying things like price-floor offers, e.g. "if you don't cut on route X, I won't either", but via completely public press conferences that openly said things like, "we're not planning to cut fares in the next 3 months on this route, unless a fare cut by Competitor A or B out of these hubs forces us to".
Labor hasn't been losing at all. Wages haven't gone up that much, but total comp has. Companies give their workers a greater portion of their compensation in (untaxed) insurance, rather than in (taxed) wages.
Unless I'm doing something wrong, that graph seems completely wrong. Is it adjusting for inflation?
2000 non-wage compensation per employee is (Stats taken from your first link and 6.2C):
(615,931 * 1,000,000) / (137,228 * 1,000) = 4,488 per employee
2009 non-wage compensation per employee is (Stats taken from your first link and 6.2D):
(1,072,019 * 1,000,000) / (136,089 * 1,000) = 7,877 per employee
Your graph shows an increase of close to 20,000 from 2000 to 2009. If wages were stagnant, non-wage compensation doesn't explain this increase.
Edit to add: if you look at private companies only, which seems fair given this article is about collusion between private companies, the numbers are worse than those mentioned above:
I don't think it adjusts for inflation. Adjusting for inflation, we have total comp per FTE worker of $49.8k in 1998 and $57k in 2009. But you are right, benefits don't explain the entire increase. Wages went up as well, from $47k to $52k (inflation adjusted).
Also, since the article is about collusion between google and apple, we should really be comparing compensation for the best programmers. I admit, I have no idea whether that went up or not.
Your graph has even more flaws than guelo's graph. In addition to having the same flaw I pointed out in his graph (it looks at wages, not comp), it also doesn't give magnitudes at all. All it gives you is relative proportions.
yes, CEOs got huge wage increases, the bottom half was flat. That's how averages work. If Bill Gates walks into a homeless shelter the average net worth of the 10 homeless people and billyG is over a billion!
Did you even look at the graph that you posted? It shows an increase in median wages, not mean wages. Bill Gates walking into a homeless shelter does not affect the median wage. The article it is based on also shows an increase in compensation even at the lower percentiles. From the article:
"Wage growth rates at the 10th and 20th percentiles were only slightly below the median growth rates, increasing by 17 percent and 18 percent, respectively."
"As noted, some economists have argued that relatively large wage gains at the top end of the wage distribution drove the increase in average wages, while median wages grew little if at all. I have shown that, in fact, median wages increased appreciably since 1975—by 28 percent—once benefits were included"
When he says that median wages increased, he is including the insane amount healthcare costs have risen. He is counting what employers pay for health insurance as compensation for workers. This makes sense on some level, but it also makes it clear that the take home money of average workers has stagnated while it has sky rocketed for the super rich. The fact that employers are paying more for healthcare (and we are paying more for it too) is not a sign that things have improved for average workers, in fact it's a sign of the opposite.
In most non-US countries the "tax" people pay for health insurance is a lot lower, and collected by the government instead of private for-profit companies.
There was a story here just a few days ago about Google employees interviewing at Facebook, despite having no intention of leaving, just as a wage negotiating tactic. Now let me just say that I have no problem with that, in "real life" you don't get what you deserve, you get what you negotiate.
I'm just saying that what's sauce for the goose is sauce for the gander. Sometimes the wider economy favours the employee, sometimes it favours the employer, that's all.
Indeed a mirror image, and possibly causally related. In the U.S. at least, the big union-organization frenzy was, perhaps not coincidentally, mostly in industries dominated by large industrial trusts that colluded with each other. It seems like a reasonable defensive reaction, even if not ideal: if your counterparts are all colluding with each other, so you have no real choice of employers, you pretty much have to collude as well if you want any chance of negotiating a decent deal.
(And, often, the industrialists were colluding with local governments in addition to each other, making it even worse; especially during the period of the "mine wars".)
I don't really like unions, but collusion like this is an understandable reason to form them: if the companies are all agreeing behind closed doors to do X and not do Y, the only real ways to force them (since they've removed the ability of market competition to do so) are to either: 1) pass a law banning the objectionable practice, e.g. California's prohibition of non-compete agreements; or 2) get a large enough group of people to all agree not to work for any company unless certain terms are met.
Given that the purpose of unions is to weaken companies' bargaining position by preventing them from "divide-and-conquering" the workers, I would guess...almost none? And it would be perfectly ideologically consistent?
It would be interesting to see companies genuinely compete for talented developers. I don't think the guys that are 10x as productive would be making 20% more anymore.
I know someone who is 10x more productive than his entire team, I worked in a next-door department and watched the beast do his magic. Truth be told, no one liked him. We couldn't keep up with him, all our bug reports would be several releases too old. We couldn't get him to install an IM client, he doesn't carry a phone, his email response rate is ~5%, several days too late, and only responds to say he can't make it to social gatherings, etc.
We wasted weeks holding meets to architecture something he already had in place, grrrr.
He wasn't a child, but a grown man with gray hair. Not exactly a prima dona either; he will happily talk to you for ours about your build problems and give you all the help you need. He was just not very good at communication. He was a fake "yes man"; he says yes to every request and suggestion, but somehow only his more sensible ideas end up in deployment.
I don't think someone who is 10x as productive, but emits zero feedback or communication is worth the trouble of poaching from others, specially of you're a big corp. Give him 10x market rate and let him bootstrap a startup all by himself, sure, but this particular guy would suck in a team environment.
He really didn't fit any "hacker" stereo-type either. He was a fit soccer player / yogi, worked strictly 9-6, and had a taste for illicit leisure .. I think.
>We couldn't get him to install an IM client, he doesn't carry a phone, his email response rate is ~5%, several days too late, and only responds to say he can't make it to social gatherings, etc
This is probably why he was so much more productive. I've personally turned off notification on my email and tend to set my IM to "away" because it's too distracting to productivity when people can just interrupt me at any moment. We already have a bloody meeting every morning. What ever you have to say can certainly wait until then. I wonder if anyone has done a study of how much money has been lost to these "open plan" working environments.
That's what "solid B+" players are for: the rented lakehouse party, the corporate kumbayas and sufficiently-buzzed Wednesdays at the bar across the man-made pond in the drab, suburban office park. That's where A+ players go to die. That's why even at mid-sized software companies, we didn't hire the A+ players because they make hiring managers and peers feel stupid and impotent.
I should know: I'm a B+ player.
And, if by "illicit leisure" you mean "smokes the herb", I think you'll find that alot of guru type hackers are WAY into that kinda stuff. In fact, at my company, our HR technical recruiter once said that if corporate all of a sudden started random drug testing, half of the developers would be gone before they could read THC on the LabCorp printout.
Year ago we were getting our second round of VC investment from a group of companies that included an American VC company (we were in the UK and our first round had been from UK VCs only).
I remember saying to our dev team "these guys want compulsory drug testing for all staff" (I was joking) - the looks of horror on the faces of the best developers in the team were priceless.
I've never used illegal drugs, and I would be horrified myself at that kind of request. I would see it as an indicator the VC company wanted a distrustful, adversarial relationship.
One thing I've learned is some people artificially appear more productive by offloading unpleasant tasks. Some of those requests, for example, might have been things that customers specifically asked for. And someone else on the team would have had to implement them, maybe on top of their regular workload, just because this guy wouldn't. Some of those emails he wouldn't answer might have been blockers for other people. If you can get away with it, great, but eventually people will figure it out.
I respect him way too much to think that, but you're right, others have been the first line of defense when it comes to keeping up with changing specs. However, when those settled the requirements, he was able to chew through them quicker than anyone else.
He also had a deeper sense of memory. I was only a contractor and worked with them briefly, but from what I have seen, he was the one most aware of what has been tried before and failed. For example, his team made an impulse decision to outsource some chunks of the platform to a 3rd party app, but he was able to connect a few dots and point out that the 3rd party app uses a SOAP library, which in turn uses an http client lib, which uses something else, which they found to be non-reenterant .. or some such.
The rest would have discovered this later and ended up patching it, while he is able to make good decisions right from the start. It helps that he was super specialized, and done nothing but C++ and PHP, on Linux, for the last 15 years; while everyone else on the team had a broad encyclopedic knowledge of a lot of stuff.
How do you identify someone who is 10x more productive? The difference between good and great is not always apparent in an interview.
Perhaps developers with significant amounts of open source work could be identified but I'm sure that for every one of those there are several amazing developers who are instead working on proprietary stuff.
That's true, but are those colleagues allowed to talk about the work that the person did? At a lot of places, the only thing the manager can confirm is that the person worked there during the dates given on the resumé. Further questions are to be directed to HR, which will filter any genuine feedback the manager can give.
There's no objective method, but many experienced programmers are capable of using subjective measures. Indeed, such skills are a huge competitive advantage to established dev. shops with talent (hire the best, keep hiring the best).
So they'll all just end up with a less talented workforce in the long run, leaving room for younger, more innovative, and generous companies to eat their lunch.
This would be great in theory, but however you cut it, it really sucks when the most capitalized companies are all colluding with eachother to prevent the market from working efficiently.
Expecting small companies with very little capital to throw money at developers because big companies are being "bad guys" about something and "good guys win" is... not very realistic.
If these allegations are true the big companies involved are effectively controlling the rate in the entire market (this would include rates in startups and other smaller companies). Why would smaller companies (with less money) start throwing more money at workers than companies that could actually afford to do so but choose not to unless someone twists their arm?
That is the way it should work at least. This gives credence to the companies defense that they did it to allow cross company cooperation without poaching. But do all of these companies really have engineers meeting and working on the same projects? Sounds pretty flimsy to me. I can't figure out what the goal of it was because none of the explanations really sound all that useful.
Standards organizations frequently have very good people from many of those companies working closely together under circumstances that make it very clear how much the company trusts those people.
Wow. I personally read the companies argument as huge lie.
> They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer.
> They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer.
It seems like they want to build their business on deception, and hope that the employees can't figure out where is a better place to work, instead of what I interpet as an honest solution, being open and allowing people to choose where to work based on good information, and then trusting them.
Does a human being have the right to contract with whomever he wants to sell his labor to?
Seems to me that these agreements might interfere with that, although the article does not seem to give enough information to tell exactly how they were structured.
An interesting flip on the right-to-work laws. Those are usually targeted at union-negotiated exclusivity provisions, e.g. if a company and a union sign an agreement that the company will hire only members of that union, states with "right-to-work" laws hold any such contracts unenforceable. It'd be interesting if the principle were extended to ban any contract that interfered with the ability of two parties to come to terms, though. For example, if I have a right-to-work as a programming employee, do I also have a right-to-consult as a programming contractor, rendering any exclusivity provisions standing in the way void?
It seems to me like the principle should be similar. If a company has an exclusive-vendor agreement with an engineering-consulting firm for all its engineering services, that seems very much like the case where the company has an exclusive-hire agreement with an engineering union for all its engineering employees (just think of the union as a labor-selling firm). In both cases they've agreed to only purchase a certain category of services from a certain category of providers. I'd be somewhat amenable to banning all these kinds of exclusivity agreements (including non-compete, no-poaching, union-labor-only, exclusive-vendor, etc.).
The problem is that even if you made a contract between the colluding companies unenforceable, the companies would be glad to collude anyways because it is in their best interest to maintain the agreement.
>Does a human being have the right to contract with whomever he wants to sell his labor to?
Yes, a person does, but I don't think that question really gets to crux of the matter. I think the question is whether these companies were forming a cartel of sorts. Not a cartel of widget or oil production, but a cartel of jobs production. Its actually not clear to me that existing anti-trust law covers this case, and, from the DoJ's actions, it isn't clear to them either.
If the Justice Department was confident of its case, we'd be seeing a lot more publicity in order to put pressure on the companies involved. The fact that DoJ isn't raising a ruckus over this means they think they have enough to go to trial, but not necessarily win. In circumstances like these, where the law isn't exactly clear on the topic, both sides seek to settle because neither wants to be proven wrong in open court.
In most states, non-compete agreements are upheld by courts. In California, non-competes are almost always thrown out by courts [1]. In other states, such as NY or OH, non-competes are always interpreted in favor of the company.
What was being done by the companies is an informal arrangement to make non-compete agreements exist even in the cases where the employee didn't sign one.
Notes:
1 - Pretty much the only non-competes upheld in CA courts are ones where the signing party sells a business or is a major partner.
This is especially interesting in light of the recent stories about Google offering huge raises and incentives to keep key employees from jumping to Facebook. Good thing that Google and Facebook don't have a no-poaching agreement.
But not so good that all these other companies had no poaching agreements.
Since Corporations have become bigger and smarter, Govt cannot monitor their day-to-day illegal & immoral activities.
It is better to breakup these corporations into smaller entities to promote competition and solve unemployment crisis
Search for the headline on Google and click on the link from there instead of here. At worst, registering will let you read a lot more stories for free; they don't spambomb free registrations.
Some economists believe that banning such agreements could harm Silicon Valley's open, collaborative model.
If the existence of an agreement isn't disclosed to the employees, then the model is not really what it is always held out to be, but something more akin to private industrial policy. I don't believe this is any better for consumers than for employees over any length of time. I've personally felt (as a consumer) that tech & internet development have stagnated in the last year or two, notwithstanding the existence of new things; perhaps this is why.
Settlement or litigation, this is probably going to set off a wave of cross-hiring because firms will no longer have the security of the agreement in place when negotiating employment agreements, and turning away a candidate from another firm with good skills may look suspicious. Good for engineers, good for the local economy, probably good for innovation; not so good for CFOs and CIOs who like sleeping at night.
I'm guessing companies will settle rather than fight; but if not, it'll set off a sector-wide feeding frenzy in the market. This should make the rest of the year interesting. It's partly political, to be sure, but slow wage growth in a period of generally rising productivity per capita has been a source of discontent for quite a while now. There is a lot of pent-up frustration, and also a lot of companies sitting on cash reserves in search of a market signal; neither situation is sustainable.
Incidentally, Microsoft, IBM and Genentech are all said to be in the clear.