I also think monopolizing talent enables software companies to make sure those high fixed costs stay nice and high.
If you disagreed with this, is it because you think it is literally false or because you don’t agree with the implied argument that software companies are doing this on purpose?
Unlike the Ferrari example, there’s no software engineer union for Google to make an exclusive contact with. If Google overpays for engineers then that should mostly result in increased supply, along with some increase in price.
Also, it’s not a monopoly (or monopsony) because there are many tech companies and they are not forming a cartel on this.
Also tech companies are lobbying for more skilled immigration which would be self-defeating of they had a plan of increased cost of software engineers.
If https://outtalent.com/us50/ is to be believed, SWE engineers look pretty concentrated at the top ~5 companies and their subsidiaries. Do you think that data is incorrect?
Concretely, I would claim that >80% of the most skilled software engineers in the US work at <10 companies. Edit: I thought about it more and I think this is actually more like 65% at the 10 biggest companies, but that doesn’t change my central claims.
For those disagreeing-- 1. I continue to believe that tech companies derive much of their economic power from cornering the skilled engineering labor market,
2. this is highly threatened by the advent of AI capable of coding,
3. and thus many big tech companies have massive economic incentives to limit the general public’s access to models that can code well.
If I changed my mind about any of those 3 points, I would change my mind about the main post. Rather than downvoting, or in addition to it, can you please explain which part you disagree with and why? It will be more productive for everyone and I am open to changing my mind.
I think the biggest tech companies collude to fix wages so that they are sufficiently higher than every other company’s salaries to stifle competition
The NYT article you cite says the exact opposite, that Big Tech companies were sued for colluding to fix wages downward, not upward. Why would engineers sue if they were being overpaid?
Sorry, I can elaborate better on the situation. The big tech companies know that they can pay way more than smaller competitors, so they do. But then that group of megacorp tech (Google, Amazon, Meta, etc.) collude with each other to prevent runaway race dynamics. This is how they’re able to optimize their costs with the constraint of salaries being high enough to stifle competition. Here, I was just offering evidence for my claim that big tech is a monopsonistic cartel in the SWE labor market, it isn’t really evidence one way or another for the claims I make in the original post.
If you disagreed with this, is it because you think it is literally false or because you don’t agree with the implied argument that software companies are doing this on purpose?
I think it’s literally false.
Unlike the Ferrari example, there’s no software engineer union for Google to make an exclusive contact with. If Google overpays for engineers then that should mostly result in increased supply, along with some increase in price.
Also, it’s not a monopoly (or monopsony) because there are many tech companies and they are not forming a cartel on this.
Also tech companies are lobbying for more skilled immigration which would be self-defeating of they had a plan of increased cost of software engineers.
If https://outtalent.com/us50/ is to be believed, SWE engineers look pretty concentrated at the top ~5 companies and their subsidiaries. Do you think that data is incorrect?
Concretely, I would claim that >80% of the most skilled software engineers in the US work at <10 companies.Edit: I thought about it more and I think this is actually more like 65% at the 10 biggest companies, but that doesn’t change my central claims.I also disagree with your claim that they are not a cartel. I think the biggest tech companies collude to fix wages so that they are sufficiently higher than every other company’s salaries to stifle competition, while also limiting race dynamics to maintain profits. I think this is done in the form of selectively enforced non-competes, illegal non-poaching agreements, and other shady practices. This has been alleged in court and the companies just settle every time, e.g. https://www.nytimes.com/2014/03/01/technology/engineers-allege-hiring-collusion-in-silicon-valley.html?unlocked_article_code=1.uk4.A5Sn.q5fVDfF_q8Wk&smid=url-share
For those disagreeing--
1. I continue to believe that tech companies derive much of their economic power from cornering the skilled engineering labor market,
2. this is highly threatened by the advent of AI capable of coding,
3. and thus many big tech companies have massive economic incentives to limit the general public’s access to models that can code well.
If I changed my mind about any of those 3 points, I would change my mind about the main post. Rather than downvoting, or in addition to it, can you please explain which part you disagree with and why? It will be more productive for everyone and I am open to changing my mind.
The NYT article you cite says the exact opposite, that Big Tech companies were sued for colluding to fix wages downward, not upward. Why would engineers sue if they were being overpaid?
Sorry, I can elaborate better on the situation. The big tech companies know that they can pay way more than smaller competitors, so they do. But then that group of megacorp tech (Google, Amazon, Meta, etc.) collude with each other to prevent runaway race dynamics. This is how they’re able to optimize their costs with the constraint of salaries being high enough to stifle competition. Here, I was just offering evidence for my claim that big tech is a monopsonistic cartel in the SWE labor market, it isn’t really evidence one way or another for the claims I make in the original post.