<story><title>Facebook Refused No-Poaching Agreement With Google</title><url>http://techcrunch.com/2014/03/24/sheryl-sandberg-facebook-refused-no-poaching-agreement-with-google/</url></story><parent_chain><item><author>cromwellian</author><text>Presumably the shortage of labor was still real, and if they needed to hire people, but couldn&amp;#x27;t poach, then they hired them from the rest of the talent pool. If that&amp;#x27;s the case, then removing the &amp;quot;cold calls&amp;quot; from the talent search might have had the effect of actually driving up salaries for those not working at these companies, since potentially reduced the supply.&lt;p&gt;If that&amp;#x27;s the case, then it would not have saved money, rather, it would have had the effect of simply shifting the money from going to existing Google&amp;#x2F;Apple&amp;#x2F;etc employees to applicants from smaller firms.&lt;p&gt;That is, it changed the distribution of spending, and probably in a more egalitarian way, distributing the spending over a larger pool, instead of simply fighting over, and raising the wages, of the small group of superstars at the big companies.&lt;p&gt;These companies are spending on R&amp;amp;D and increasing the percentage year over year, they are also spending huge sums of acqui-hires, and hiring faster than the local communities, or their own office space, can handle.&lt;p&gt;You could argue that excessive salaries are actually bad for allocation. Wall Street has infamously brained drained tons of the best and brightest to figure out how to gain small efficiencies in stock trading. What discoveries might have occurred had string theorists not left to go optimize portfolios?&lt;p&gt;One thing I wouldn&amp;#x27;t call engineers is cheap. You&amp;#x27;re talking about people making upwards of $150-200k in salary, and probably up to half-million when total compensation is considered. I paid more in taxes last year than my mother earned in several years of working as a cashier. And that&amp;#x27;s pretty sad. I grew up poor so I have a different perspective on this, but I see a lot of #zeroethWorldProblems whining going on in the valley while the world around them is falling apart. It&amp;#x27;s useful to have some perspective, and honestly, if these companies are to be fined and sanctioned, I&amp;#x27;d rather the money go to poor people, instead of lawyers and techies who need to increase the bid on their studio apartment.</text></item><item><author>CoolGuySteve</author><text>The worst thing about this oligopoly&amp;#x2F;cartel is that during the period they were refusing to poach, they accrued billions cash reserves while spending only a little on R&amp;amp;D (which I assume is mostly engineering salaries).&lt;p&gt;Even after the class action lawsuit is settled, it&amp;#x27;s likely the penalty won&amp;#x27;t be anywhere near the amount of profit that was illegally captured.&lt;p&gt;Furthermore, think about what these companies would have chosen to work on had engineers been more expensive.  Would we have seen more useful products coming out of the valley if staff allocations had worked out differently?&lt;p&gt;When people are cheap, throwing them into doomed ventures like Google Buzz or Apple&amp;#x27;s awful Samba clone isn&amp;#x27;t nearly so devastating to whatever middle manager chain dreamed them up.</text></item></parent_chain><comment><author>efuquen</author><text>Regardless of what the ultimate consequences would have been of any price fixing scheme, do you or don&amp;#x27;t you believe it is &lt;i&gt;wrong&lt;/i&gt;?  You can argue all day about the hypotheticals of how much or how little this all actually affected wages, but if you believe in principle that some general free market mechanism should be the determining factor in private sector wages, then you should disagree with what happened.  Even if in the end it&amp;#x27;s a fight between the merely wealthy (which, btw, I don&amp;#x27;t think every engineer at Google&amp;#x2F;Apple&amp;#x2F;etc are making those top wages, at least not based off median numbers I&amp;#x27;ve seen) with the super wealthy you still had an unfair practice that skewed what should have been market wages and put more money into the pockets of the super wealthy.&lt;p&gt;I think it&amp;#x27;s acceptable to say that this scheme was bad and wrong and also to acknowledge that there are more significant and severe wealth and wage problems in this country for a large group of people outside engineering, law, medicine, etc. and those problems need to be addressed.  I don&amp;#x27;t like the attitude of saying hey, the engineers are doing pretty good guys, it&amp;#x27;s ok if the even richer take money from them they should have rightfully earned.  That won&amp;#x27;t solve any problems, least of all the more severe wage discrepancies or plight of the poor.</text></comment>
<story><title>Facebook Refused No-Poaching Agreement With Google</title><url>http://techcrunch.com/2014/03/24/sheryl-sandberg-facebook-refused-no-poaching-agreement-with-google/</url></story><parent_chain><item><author>cromwellian</author><text>Presumably the shortage of labor was still real, and if they needed to hire people, but couldn&amp;#x27;t poach, then they hired them from the rest of the talent pool. If that&amp;#x27;s the case, then removing the &amp;quot;cold calls&amp;quot; from the talent search might have had the effect of actually driving up salaries for those not working at these companies, since potentially reduced the supply.&lt;p&gt;If that&amp;#x27;s the case, then it would not have saved money, rather, it would have had the effect of simply shifting the money from going to existing Google&amp;#x2F;Apple&amp;#x2F;etc employees to applicants from smaller firms.&lt;p&gt;That is, it changed the distribution of spending, and probably in a more egalitarian way, distributing the spending over a larger pool, instead of simply fighting over, and raising the wages, of the small group of superstars at the big companies.&lt;p&gt;These companies are spending on R&amp;amp;D and increasing the percentage year over year, they are also spending huge sums of acqui-hires, and hiring faster than the local communities, or their own office space, can handle.&lt;p&gt;You could argue that excessive salaries are actually bad for allocation. Wall Street has infamously brained drained tons of the best and brightest to figure out how to gain small efficiencies in stock trading. What discoveries might have occurred had string theorists not left to go optimize portfolios?&lt;p&gt;One thing I wouldn&amp;#x27;t call engineers is cheap. You&amp;#x27;re talking about people making upwards of $150-200k in salary, and probably up to half-million when total compensation is considered. I paid more in taxes last year than my mother earned in several years of working as a cashier. And that&amp;#x27;s pretty sad. I grew up poor so I have a different perspective on this, but I see a lot of #zeroethWorldProblems whining going on in the valley while the world around them is falling apart. It&amp;#x27;s useful to have some perspective, and honestly, if these companies are to be fined and sanctioned, I&amp;#x27;d rather the money go to poor people, instead of lawyers and techies who need to increase the bid on their studio apartment.</text></item><item><author>CoolGuySteve</author><text>The worst thing about this oligopoly&amp;#x2F;cartel is that during the period they were refusing to poach, they accrued billions cash reserves while spending only a little on R&amp;amp;D (which I assume is mostly engineering salaries).&lt;p&gt;Even after the class action lawsuit is settled, it&amp;#x27;s likely the penalty won&amp;#x27;t be anywhere near the amount of profit that was illegally captured.&lt;p&gt;Furthermore, think about what these companies would have chosen to work on had engineers been more expensive.  Would we have seen more useful products coming out of the valley if staff allocations had worked out differently?&lt;p&gt;When people are cheap, throwing them into doomed ventures like Google Buzz or Apple&amp;#x27;s awful Samba clone isn&amp;#x27;t nearly so devastating to whatever middle manager chain dreamed them up.</text></item></parent_chain><comment><author>gojomo</author><text>Not sure that the effects you theorize are true, but they&amp;#x27;re definitely possible, in the dynamic ways these shifting strategies affect real employment&amp;#x2F;resource decisions... as opposed to the simplistic &amp;quot;salary fixing&amp;quot; [sic] spin from some of the coverage.&lt;p&gt;To an extent, existing employees with stock-based compensation, and also seeking &amp;quot;purpose&amp;#x2F;control&amp;#x2F;mastery&amp;quot; satisfaction at work, share their employers&amp;#x27;&amp;#x2F;stockholders&amp;#x27; interests in quelling rampant mercenary turnover and salary-over-all bidding wars.&lt;p&gt;Another second-order beneficiary of any attempted employment cartelization could have been the startup ecosystem. As a founder or very-early employee, you &amp;quot;eat what you kill&amp;quot; rather than any industry-average salary. And, the pool of willing founders could have been expanded by missing&amp;#x2F;lower recruiting from the giants.</text></comment>