Saturday, December 26, 2015

Silicon Valley Pivots From Collusive Wage Fixing to Immigration Wage Arbitrage

It was not that long ago that news stories broke about how the late great Steve Jobs brokered a collusive wage-fixing agreement among Silicon Valley's most powerful companies.  Almost all of the top players signed on because they wanted a ceiling on the compensation for their most talented workers. Silicon Valley has since found a better way to suppress tech workers' wages.

Tech big shots aren't satisfied with keeping their most productive rock stars in line.  They want to push everyone's compensation down by encouraging the immigration of skilled tech workers who are accustomed to far less compensation than American-born STEM professionals.  Temp workers on H-1B visas can come here for training and then return to the tech employer's branches outside the US. The foreign workers will earn much lower compensation there. Global wage arbitrage will drive American tech workers to compete with those lower wages. The Silicon Valley-funded pushes for a version of immigration reform that will open the door wide to permanently high immigration in STEM labor categories.

The legal settlement in the wage collusion lawsuit cost big companies $325M.  The total funding for so far is much less than that sum.'s listing for notes that they spent $720K on lobbying in 2014 and $420K so far in 2015. That's a tiny fraction of the $50M they supposedly raised according to re/code, begging the question of whether they spent the rest on TV ads or other things that have nothing to do with adding grassroots pressure to a lobbying effort. Experienced Washington hands would have told them to engage the US Chamber of Commerce and other inside groups to identify which members of Congress are most amenable to a pro-business argument. Better luck next time.

Billionaires don't like paying a premium for highly intelligent people.  Those people would then have the financial resources to start competing firms on their own.  The Valley's mandarins would prefer that their most skilled professionals remain wage slaves motivated by non-cash perks, like gourmet food courts and on-site yoga classes.  The road to neofeudalism will be paved with uncontrolled immigration. I am all in favor of sensible immigration reform that fills true labor shortages and offers illegals some kind of safe status. I just don't think has a clue how to make that case in Washington, if they're so inclined.