You also can't look at the market statically. Higher wages will create incentives for new people to enter the profession, increasing overall supply (and eventually putting some downward pressure on salaries once again).

That's true in theory, but I don't think there are a lot of people ignoring the tech sector because median pay for a competent engineer is only ~$100k.

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 live in Australia and work in a small company and $100k just isn't enough to entice me to go over to the US to work for Google et al; It isn't that much more than what I make now, plus I get to live close to home. And yes, I can choose to move to US if I want, due to the E-3 visa.

I'm sure there are a lot more people like me.

Even the bottom level full time software engineers at Google in the US make more than 100k in total compensation.

I've only just graduated from university last year, so...

There are a lot of people like you even in the US. Cost of living in California is part of the issue. Tech companies could find the talent for less pay if their workforce was located outside the most expensive areas.

Wall Street pays much more. Anyone looking for the most lucrative sector to cash in mathematical talent would pick finance if choosing purely based on salary.

100k is a lower salary (adjusted for inflation) than high school dropouts were making in the dot-com boom doing things like server administration for companies like Go/Disney.

That's not the point, though you're right. The point is that $100k is still a lot of money when the median is ?$47k. What are all these people doing instead of accepting a measly $100k to be software engineers? I don't think 4100k jobs are so easily available in the US that people are just turning up their noses at it, but that there may be other reasons (like lack of appropriate skills) for the lack of supply. Of course more people will try to enter the profession if salaries are allowed to rise to a market equilibrium, but SW engineering skills aren't a simple commodity that people will just automatically acquire in accordance with the laws of perfect competition.

Too bad that bubble popped.

TheCoelacanth is looking at the market over the short and medium term, which is the correct way to look at it if we're arguing over whether there is a shortage today.

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.

As the saying goes : In theory, theory amd practice are the same.

You don't seem to understand-- most people simply don't have the ability to think about things in a way that is STEM friendly.

It's not an option for them to re-train, they don't work that way.

You should probably cite something to avoid getting downvoted.

e.g: http://www.bricklin.com/wontprogram.htm

I don't think that explanation quite works. There are two cases:

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...

If a company in category 2 (in the above ) pulls enough weight to make a significant change, then the companies in category 1 will add this company and pull it into category 1.

Said company would gladly go along since it benefits as well.

Have I missed some news, or is your inclusion of Microsoft in the cabal erroneous?

From the article (quoting Pando):

> ... 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.

Sure, but look at which category the companies complaining about shortages are in.

I assume you mean 1. But if they're complaining they can't get enough engineers, it can hardly be that they're also hoarding them, right? At the very least, the companies that are a) paying the most and b) looking for ways to access a larger labor pool have got to be using the engineers they have at near maximum efficiency. Otherwise, those would be weird levers to pull. They actually are the companies that in an honest market get the engineers anyway; they already pay at the top of the market. That they've dodged paying for it in full doesn't change that.

If you look at it from a more negative perspective though, lobbying for more H1-B visas is an even more effective way to decrease engineer compensation, because you can reduce your salaries further by increasing the pressure on US engineers by threatening them (implicitly or explicitly) with losing their jobs to cheap foreign labor. One could easily argue it looks like two sides of the same coin: using every dirty trick available to avoid paying engineers according to their actual value to the company

I'm completely willing to believe that big companies have poor intentions when lobbying the government. H1-Bs are just more market distortion. (I personally believe we should just hand software engineers green cards at the airport and remove the cheapness from foreign labor. More engineers, but without the bullshit.) I'm just saying it doesn't make the engineer shortage less real. All the ways you hold down salaries are ways that companies are dodging honestly dealing with a legit shortage.

The lower price will further reduce supply, by encouraging potential employees to move to better paying alternatives, outside the domains in which salaries are being fixed.