So in the bay area they found out that the largest employers actually conspired to not hire each other's senior employees. Which serves to decrease mobility for people and makes it so their wages become lower. When I worked in Canada it seemed like companies were very desperate for talent but weren't really willing to pay beyond a certain amount. It's hard to say if there is just a natural ceiling for pay or if it's actually some sort of setup to keep the compensation at that level.

Steve Jobs was the central figure in influencing the anti-poaching policies from what I've come across.

https://money.cnn.com/2014/08/11/technology/silicon-valley-p...

This is why market demand works for the benefit of the employee.

> "Only when Facebook declined did Google consider how to retain its employees, the judge said. It boosted "the base salary of all of its salaried employees by 10% and provided an immediate cash bonus of $1,000 to all employees,""

This is a fascinating question. My guess is that all industries have different levels of collusion/wage-fixing. If something as big as THE TECH INDUSTRY can get away with colluding to keep a ceiling on wages, then surely every single other smaller industry can as well.

There are many ways to suppress wages besides wage-fixing collusion. About 25% of American workers have non-compete clauses in their work agreements, for instance.

True, but non competes are mostly unenforceable in California, so that doesn’t account for the situation in the Bay Area.

Only when people decide to fight them. Sadly, many people un-aware of their dubious legality honor them even if they are in fact unenforceable.

The wage gap exists outside of California, and California also happens to be the only state in which non-competes are strictly voided by the courts.

Outside the Californian bubble, they're a big problem.

> Industry is crying about a skill shortage

Perhaps they are crying because a skill shortage means they would have to pay more, but instead they would rather the government encourage more people to train as software developers, increasing the supply so that salaries could be lowered.

This. Also, money doesn't grow on trees if you're a normal business. Rising wages means many businesses would have to close. It wouldn't matter to employees, because by corollary they'd have better opportunities, but if you were the owner of such a business, you'd be crying too.

Rising wages could also mean shareholders just accept lower profit margins. Still profits, just less.

The simplest mechanism to offset higher wages is stock options. If a company needs to attract talent they can use that.

isn't that just how a market works?

Yes, but new markets have high network effects and winner-takes-all outcomes. There is a non-zero risk of having a couple of trillionaires and billionaires living isolated from a pariah sociality. That would cause a enormous instability, violence and crime.

> That logic should also work in reverse: If high-skill talent is rare their wages should rise.

Which is precisely why the top 10% in the Silicon Valley are earning more money. Some of what would otherwise be localized gains are offset by globalization and offshoring, but income is definitely going up for those people in the Valley.

I don’t know about Germany- that’s not where the article was about so it’s not terribly relevant here.

I work on HR software that provides sourcing. We have a feature that allows you to skip candidates from certain companies.

We need a law that would make wage fixing a crime with harsh sanctions and better data from IRS about wages.

Here is a free statup idea. Create a better version of Unions that would maximise people's earning potentials and improve working conditions.

I don’t know what country you work in it might be worth doing an anonymous tip-off to your local competition authority if you’re in Europe. A software product providing affordances for tacit collusion would have a high bar to clear. It might be worth it if it’s even sold in the EU somewhere.

> If high-skill talent is rare their wages should rise. I do not see that happening. Well, at least not here in Germany. Industry is crying about a skill shortage but the corresponding wages are stagnant.

Businesses resist increasing pay, because that eats into their margins.

Even in capitalist America, SWE pay stagnated until fairly recently. Employers actively fought against increasing SWE pay, even as their shortage was getting worse. They kept wages artificially low, and successfully lobbied the government to fill their openings with cheap H-1B employees - the H-1B quota back then was over twice its current level.

That was a short-term victory, and long-term loss for the industry. If more engineers made $150,000 in SV back in 2005, there wouldn't be such a shortage today.

Eventually this flimsy dam broke, and now we're seeing pay more in line with where it should be according to the supply/demand curve. Arguably it's still not quite there, even in SV, where engineers with their "outrageous" pay still can't afford a home.

So in Germany, apparently employers are still in the "resist and whine to the government" phase. I bet they're begging for the government (i.e. taxpayer) to fund skill-building programs, import more high-skilled workers from 3rd-world countries... the usual stack of solutions.

I'd also suspect higher taxes have something to do with it. Why should I stretch myself paying $120k to an engineer, if he's only going to get $65k out of it? I don't know too much about the taxes in Germany, but I've seen this problem in other foreign locations where we were recruiting: increasing pay did not result in more or better candidates, and all the best candidates were just trying to get to the US any way they can.

There will never be enough pay for swes to buy homes, because there aren't enough homes for everyone - and so if you pay them more the prices will go up, but in most of SV there isn't that much room for more houses. Don't get me wrong, I'm in favor of more money for swes (I'm a swe!) but I disagree with that point.

Sure, it was never my main point to begin with. I agree about the real solution, as I stated elsewhere in this comment thread: build more housing, especially efficient housing.

Still, I find it amusing when people complain about "filthy rich engineers" who can only afford to live in shared apartments with roommates in SF...

Build up. Thirty story apartment buildings are not cutting edge technology. Neither are eight story ones and they don’t even require steel beam construction.

There is an enormous amount of room for new housing in Silicon Valley! The obstacles are entirely legal and regulatory.

If you want to help fight this: https://yimbyaction.org/

I agree with you that there could be denser housing, but that zoning laws prevent people from building more dense housing. So in practice there's no more room.

Zoning laws can be changed, and you can help:

https://yimbyaction.org/

Don't forget that more engineers can increase wages too. You seem to be stuck in a bit of a simplistic lump of labour idea about supply, demand and salaries.

More engineers means there are more companies that can grow, which increases opportunities for integration and building on top of. Think of engineers as more like fuel for a fire: the world isn't sufficiently automated, and the way we automate it is by applying engineers to the problem. The more we throw at it, the hotter it can burn; and the rewards depend on the value of the thing being automated, not mere supply and demand.

If we only had one engineer, they would not be worth the billions of amappgoosoft put together. It's very far from a zero sum game.

Because good engineers won't move away, because they like being paid well.

That’s not necessarily true. There’s a lot of high-profile executives that have left top tech companies because of family reasons. And even for ordinary engineers, if family on the opposite coast or in a different country becomes ill, they may move to take care of them, despite the lost income.

> If high-skill talent is rare their wages should rise

Not if wages already are high.