Silicon Valley Tech Wage Suppression
Some of the scope of the Silicon Valley tech wage suppression agreement has expanded recently, and now covers a much more vast section of the tech industry.
"Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees."
I'm going to pick on Google here, because they represent themselves as a company who bears the unofficial motto of "Don't be Evil". By doing so, they justify people calling them out on it when they do something which is absolutely, 100% evil.
"Don’t be evil. We believe strongly that in the long term, we will be better served — as shareholders and in all other ways — by a company that does good things for the world even if we forgo some short term gains."
– Google in 2004 IPO (page 32, near the top)
I'm not saying any of these other companies come out clean here. Far from it. But the hypocrisy and deception employed here is astounding. I think the only solution is to do the same thing with employee salaries as we've done with CEO salaries: make them more transparent. I think efforts like Glassdoor help to allow employees to more adequately estimate their own worth in a very complex job market. Pay transparency has been shown to account for the rapid increase in CEO pay over the last 20-30 years.
"the drive for [CEO pay] transparency has actually helped fuel the spiraling salaries. For one thing, it gives executives a good idea of how much they can get away with asking for. A more crucial reason, though, has to do with the way boards of directors set salaries. As the corporate-governance experts Charles Elson and Craig Ferrere write in a recent paper, boards at most companies use what’s called “peer benchmarking.” They look at the C.E.O. salaries at peer-group firms, and then peg their C.E.O.’s pay to the fiftieth, seventy-fifth, or ninetieth percentile of the peer group—never lower. This leads to the so-called Lake Wobegon effect: every C.E.O. gets treated as above average. With all the other companies following the same process, salaries ratchet inexorably higher. "
TL;DR version: Transparency in pay gradually forces salaries higher, because as the average pay rises with talent, average workers get paid more to account for the rising median pay.
Tech companies of this magnitude are pulling in money hand over fist, and rather than putting that money back into the pockets of the employees who are working to make it happen, they're busy holding it in off-shore accounts, likely hoping for a "repatriation tax holiday" as employed by the Bush administration in 2004.
Here's the thing, though. If they were to put those funds to work paying their employees more, those same employees would be able to afford more purchases, which grows the economy. The more money employees have, the more they can spend. The more they can spend, the more companies make. The more companies make, the more they can pay their employees. It's a virtuous circle that works to increase everyone's living standard, from the CEO to the janitor.