Not really, price ceilings have a well-known effect of causing shortages because purchasers who should have been priced out of the market use up some of the supply. If the price had been allowed to rise naturally, those willing to pay the higher price would get what they need.
Sure, you can find examples of people who went into other areas, but given the very low barriers to entry (put some good stuff on Github repeatably, no industry requirement for an advanced or even undergraduate degree if you have talent, no unions or guilds, no competency certifications required to practice software engineering), I don't think there's such a big pent-up supply.
I'm sure there are a lot more people like me.
Furthermore, it's not like quantity supplied is perfectly responsive to price. It takes time for new people to enter the industry.
Talking about the long-term is rather pointless because technically, from a theoretical standpoint, everything is supposed to equilibriate over the long term. All shortages self-correct over the long term. Again, this is theoretical.
It's not an option for them to re-train, they don't work that way.
1. Companies in the Google/Apple/MS cabal
2. Other companies
Companies in 2 can always just pay more for what they want, since they're not governed by the cap. If they did that, of course, they could pull a bunch of people away from 1 and the price level would keep rising. That didn't happen because (mostly) only companies in 1 are able to pay at near the cap level anyway. So there might be inefficient hoarding, but it's just companies in 1 hoarding from each other.
It doesn't analogize exactly to, say, anti-gouging price caps for gasoline in a snowstorm (which, I agree, lead to terrible shortages and inefficient allocations), because this is equivalent to the gas stations setting a price floor (people shop at places with the lowest prices but work for the place with the highest wages). And then some gas station down the street opens a gas station with prices lower than the floor...
Said company would gladly go along since it benefits as well.
> ... 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
You can also see Microsoft in the screenshot of Google's "Do not call" list.
Neither Bill Gates nor Steve Jobs would get in the DOOR at a tech company today. They didn't finish college... Or the RIGHT college. Their own companies would buy their startup and boot them.
It's a culture of childishness that they have so much money and resources they don't have to value WISDOM that employees might bring. In fact they actively ROOT OUT those employees in their hiring processes.. That's why all the games.. They don't want employees that won't play. They have myopic NIH syndrome hard.
It helps a bit if you are filthy rich at the beginning.
Oh, I have a feeling they'd squeak by, somehow.
Actually, it just gave the non-engineers more leverage. If the engineering rates where higher, there would be more engineers who would be founders. Engineers would have a larger % of the startup, since non-cash compensation would have to be offered.
Also, the artificial deflation caused some engineers to be stuck in a bad job.
That's why I won't be anyone's employee. It's a bad deal for me. It's a bad deal for many engineers who are employees right now.
Unfortunately, it took me a while to learn the game. There's a business side to being an engineer. You don't learn that being an employee. It's against the interest of the management to have their employed engineers think that way.
No, it just means the sense of entitlement amongst tech CEOs is even greater than previously thought.
But if the salary was higher, there is a good chance that I would have worked at that job for longer than I did. So I think salary does affect labor supply, and the supply of engineering talent is not as inelastic as you may think.
Rules for wage negotiation for ordinary employees have generally much bigger impact.
Well then you are not reading it correctly. What does it say?
>> Google is the talk of the valley because we are driving salaries up across the board
Schmidt says as plain as day, in e-mails that escaped his admitted attempts to remove a paper trail, that this is about holding down wages. He says it as plain as you can say it. I can read this, and the other HN readers can read this in black and white. That people like you feel the need to deny this happened when they have been caught red-handed says more about you then it does about what happened.
Yes, I read it very well. Schmidt indeed mentioned holding the wages down, BUT from the context it's clear they mean those who are targets of employee poaching. And that's certainly not everyone - quite the opposite, only exceptional individuals or strategy hires.
Hint: It doesn't go down.
Amazingly short-sited argument. It forces people to either accept a low paying job in a field they love, or find another field just to make ends meet.
The companies themselves have created the shortage they're complaining about.
When Harvard grads start choosing Google over Goldman Sachs, I'll believe in the engineering shortage. Now excuse me while I return to my 10 hour Craigslist odyssey to find an affordable Bay Area apartment...
I'm not even sure if finance beats CS pay for those in the top-tier, especially on a per-hour worked basis. It may be hard to track as so much comp in finance is bonus and so much in CS is equity.
It also means that the deflated salaries/compensation may have led to managers/business/finance decisions being all wrong - investing in some projects but not others and skeweing the technical landscape. Im thinking of things like GWT or dartlanguage, and the like, which if engineer prices would have been correct probably would not have been made at all.
The conspiring to lower compensation has hurt the field and profession of software engineering as a whole.
This shortage of "engineers" is another excuse to make government pay for education or take more immigrants and pay for them, their health care costs, language education etc, to make tax-payers pay for recruiting engineers to the tech giants.
I think the opposite. It is not in the best interest of "the product and output" for engineers to keep switching jobs every few months to get increasingly greater salaries for the same work. It creates incentives to not care about the product.
How many lawyers do you see switching jobs every few months?
Anyway software engineers shouldnt care about the product once the project is completed - the job to take care of the product is with devops or maintanence people. Development, and thats it.
> 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).