Enterprise Software

Apple, Google, Adobe sued for allegedly fixing salaries

In an attempt to stave off multi-million dollar bidding wars, several high-tech companies entered into agreements that the Department of Justice now says violated anti-trust laws.

In environments that require only the best talent, it's not hard to imagine how top tech companies could indulge in some serious bidding wars. TechCrunch recently reported that two Google employees, Sundar Pichai and Neal Mohan, were each offered millions of dollars in stock options and other compensation to keep them from defecting to Twitter.

Knowing how out of control this kind of situation could become, some of those same high-tech companies entered into agreements with one another where they would agree not to poach or cold call each others' employees.

In 2010, the US Department of Justice (DOJ) investigated these companies and concluded that they were violating antitrust laws with these agreements. The DOJ reached a settlement with six high technology companies--Adobe Systems Inc., Apple Inc., Google Inc., Lucas Film, Intel Corp., Intuit Inc. and Pixar--that would prevent them from entering into "no solicitation" agreements for employees.

This settlement did not include any compensation for those employees that had been adversely affected by the agreements, but that's about to change. There is now a class action lawsuit filed with Siddharth Hariharan, an engineer for Lucas Film between 2007 and 2008, as the named plaintiff. According to the complaint:

[Defendants] entered into at least three agreements to eliminate competition between them for skilled labor. First, each agreed no to cold call each others’ employees. Second, each agreed to notify the other company when making an offer to an employee of the other company, if that employee applied for a job notwithstanding the absence of cold calling. Third, each agreed that if either made an offer to such an employee of the other company neither company would counter offer above the initial offer. This third agreement was created with the intent and effect of eliminating “bidding wars.”

It will be interesting to see how this one plays out. It looks like it could be a long, hard road for defendants to prove and perhaps even harder for compensation to be determined.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

52 comments
MariaaJohanson
MariaaJohanson

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sl786982
sl786982

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michaelstn
michaelstn

why can't businesses do the same as a union?

jeffpk
jeffpk

I don't see the price-fixing here. The did not set one salary chart for all 3 companies and agree not to violate it. They did not even agree, to my knowledge and as far as the article indicates, not to hire someone already employed by the other companies. All they agreed upon was not to pro-actively and aggressively recruit away people already working for the other company. They can still run an ad, and those other people can still apply. As an executive I often see non-recruit wording in my own hire contracts with much the same provisions. The notification clause seems pretty irrelevant as it is only upon making an offer that it kicks into effect, and by that point the employee should be about to tell their employer anyway. (Although I agree its a bit obnoxious not to let the employee handle it their own way, I dont see anything really restrictive here. However they should be informing the prospective employee that this will happen before the fact. Its is juts a stupid way to piss off a new employee not to.) As for the last agreement, not to bid against the other, isn't that always their choice? Not to bid to keep an an employee? I don't see this agreement as having much of an effect, and I think its dishonest of a employee to go and apply for another job just to get their own em ployer to pay them more. You shouldn't apply for a job you don't want. Thats unfair to other potential employees. As I say, I'm not sure the court was right here...

stevzie
stevzie

The comments thus far seem to ignore the issue of privacy. I certainly think I have a reasonable expectation of privacy when I apply for a job. I don't expect my current employer to be notified without my permission. "each agreed to notify the other company"

rclark
rclark

Not from these companies, but still, in demand. So if they hold down the salaries of these programmers, then that puts downward pressure on all programmers. As premier companies, they generally set ceilings for salary ranges. So if the ceiling is artificially low, that hurts me. I want my money!

Who Am I Really
Who Am I Really

if these companies are forced to pay outrageous wages to keep staff then guess who gets [b]screwed[/b] the consumer of said products it's bad enough that it costs over [b]$900.00 for Adobe Premier Pro[/b] [b]if Adobe had to double it's wages to keep programmers guess what, the next version of Premier Pro would probably sell for $1,500.00 - $1,800.00 and the version upgrade "customer loyalty" discount would vanish or get significantly increased[/b] where I am, there's an unspoken agreement in the construction industry here not to poach workers in said fashion also, if I the worker go to another company and they offer me more there is also an unspoken rule that I don't go back to my current employer and demand they meet or beat the offer however, there is still room for some level of negotiation if I go to another company one of the first questions they ask in the interview is: a> do you still work there? or if no longer working there: b> you're not going back there are you [b]so, how would you like to pay double or triple for your new house due to skilled worker "poaching" and wage wars ?! [/b] consumers do it all the time they phone every plumber, electrician, or home reno company etc. in the book to get the best price or call until they get a price that they are willing to pay why isn't that illegal ! the anti-trust laws are supposed to protect the consumer but preventing companies from forming "reasonable" agreements such as not to poach workers with exorbitant wage offers [b]Doesn't protect the consumer or the workers[/b] .

ChuckSomerville
ChuckSomerville

Anyone who has had 'Management 101' has heard of Maslow's hierarchy of needs. To simplify, there are motivators and de-motivators for workers. In high-tech, massive pay is not a strong motivator as much as interesting tech challenges are. On the other hand (again for the high-tech sector) a strong de-motivator is the perception that one is being under-paid for their skills. If the wage-suppressing goes on (or if the workers get wind of the practice) they will begin to be dissatisfied and start looking to go to a smaller out-of-the-cabal company to catch up with those salary surveys this and other magazines regularly publish. Neither Government nor collusions of large companies do any good when they attempt to influence free market forces.

bill.andersen
bill.andersen

I agree..if workers take a day off they are missed because they affect production at some level. If CEO's or other management take a day off they are not missed, they produce nothing so why should they take the highest salaries?

bigpicture
bigpicture

If the problem is scarcity of resources, since when does paying more money increase the available resources. The solution to this problem in a "free market" is to get more resources. (Oh overseas!!) Now why would a corporation in that kind of labor market go overseas? (off-shoring) And why would the workers and the governments blame the corporations for off-shoring jobs? Surprise, surprise!! I have been in this game for many years, and have the same issues with the Unions, which basically is: "If you can't supply sufficient quantities of labor, at competitive rates, then we will get the work done off-shore, or bring in foreign workers to do it" It's a global "free market" after all. And if you can't get work done at the right price, eventually the CONSUMER PAYS.

trust2112
trust2112

What are you all crying about? You think your worthless butt should be paid more? Then how do you expect to be better paid if the CEO's can't make multi-million dollar bonuses? Then there is the shareholders profits. Then if there is anything left, Managerial bonuses.

jbmetrics
jbmetrics

So the largest US employer and wage fixer (who conducts collusion on a massive scale Silicon Valley only dreams of) - The US Government, has gone and fined these corporations for trying to stop a salary and benefits escalation like what we had in the 90's. This is hypocrisy at its best. Now someone who felt they couldn't exploit what went on in the 90's cause they missed the boat now wants to sue these companies for collusion. So the US government didn't help the workers affected in the settlement, didn't help make the US job market any more attractive (translate: see jobs go offshore) and didn't solve a real issue like gender-based wage inequality where women are paid 70% of what men are for the same job. Way to go USA! I can see why the US has dropped from 5th place to 9th place in the world when it comes to personal and business freedoms in just 10 short years.

bobp
bobp

Higher salaries motivate others to pursue the same positions by getting additional training - either in classes, if available, or by self-study. The higher salaries reduce the shortage of qualified applicants, although not immediately. The market balances supply and demand and affects behavior of both potential and actual employers and employees.

massimj
massimj

If you are one of the talented people who have been harmed by one of these shady deals, call a lawyer. The rest of us don't care. If I were one of these hard to replace individuals, I would be upset over collusion between these companies that would harm my chances of being all that I can be. In other words, earning as much as I can earn. Unique skills command unique compensation.

WorkingDigital
WorkingDigital

I was curious when I saw the title of this article, but after reading, it doesn't look like salary fixing was one of the allegations. It seems to be more about cold-calling and rules around counter-offers. Google's across-the-board 10% raise last Fall certainly would go against the theory that salaries are the concern. Right now, its all about talent, intellectual property, and the multi-faceted cost of turn-over. Or am I missing an allegation about salary collusion?

tmcclure
tmcclure

Other than requiring one employer inform the other of an employee applying for a position, I have no problem with this. There is nothing unethical about corporations agreeing not to poach one another's employees.

jake.katz
jake.katz

the Ayn Rand free-marketeers? Hmmmm? Still waiting.

BlueCollarCritic
BlueCollarCritic

Well its about time! It is this kind of illegal and highly unethical (as if ethics have ever stopped a large corporation from giving it to the public) that gives rise to unions that in turn make the whole thing worse. It???s like a game of one-up-man-ship where companies agree to help keep each other???s labor costs down by not stealing talent and so the workforce then has to match that with unionized labor. In the end its the regular person, the blue collar and lower level white collar people who get you-know-what by those rich and powerful few at the top of these mega corporations. Now if only we could get the government to look into the long running (for decades now) efforts by the large corporations to teach the high end business students the ideology that a minimal level of unemployment HAS to exist so as to ensure future labor is available at minimal cost to the corporations. This is a common teaching in the higher end business schools and its one of several very bad practices that needs to end.

adornoe
adornoe

because, they're the biggest culprits when it comes to collusion. Salary structure within some industries is determined by unions, and people cannot advance in their careers without that all-important criteria known as time served. You can't advance ahead of someone who's been there longer than you, and you can't demand a higher salary because, it's the union that does the negotiating for salaries for the entire membership in one fell-swoop. That's anti-competitive, in both the macro and micro levels.

AnsuGisalas
AnsuGisalas

There's no actual threat from worker-poaching, since these companies still have a limited number of positions to fill, and a limited number of tasks for these positions to perform. It just means that less young people will get a shot at a learning position and that less not-so-young people will have a chance to keep their jobs, it means a less dynamic work force and it means less new ideas being exchanged. Trusts always suck. Always.

john.a.wills
john.a.wills

I think you mean "one is being under-paid for one's skills". There is a difference.

adornoe
adornoe

When salary structures are determined by an industry, and salaries are very comparable from company to company, that is, in effect, collusion of sorts. You wont find an IT company paying a programmer $50,000 and then another company paying $100,000 for the same type of function at their company. Chances are that, the salaries may vary by a few thousand from company to company, but, salary structure within any particular industry is generally not much different from company to company. Without that kind of "unnoticed" collusion, the best talent would always end up working at the bigger companies with the bigger pockets, and the lesser companies would be unable to compete and some or many would have to close shop. There is always a good and a bad to most matters.

delf20k
delf20k

If the companies will not pay a good enough package then for high value employees there is the option for them to go overseas themselves so the companies will need to face the process of training up replacements and loosing them too and in the end you just built up your overseas competitors and when they try to go overseas for lack of the best employes the competition will have snapped them up and drained the local pool as well as they grew.

mckinnej
mckinnej

that is sarcasm. It sure sounds like it.

bill.andersen
bill.andersen

See...this is exactly the problem. The workers are the most important peole in a company...not shareholders...not CEO's...workers! Without workers you don't have a company and your shareholders will soon disappear with the dividends and bonuses when they stop. Pay the employees and accept less profits to keep your company. All these super -greedy companies will be experiencing problems keeping and hiring personnel because people are so tired of them that they don't want to work for them, and that problem is growing as many workers head overseas from Western countries.

Ryalsbane
Ryalsbane

What right does the company (and stockholders) have to thwart employees from engaging in the same free market practices that the company does, namely, securing as much wealth for themselves through free market competition. Some may say "the owners have a right to as much profit as they can get." To that I say, which owners? The owners of company stock or the owners of the talent companies use to make their profit?

TuacaTom
TuacaTom

I have no problem with having to fight to hang onto good talented people. Each change helps drive up the value of my own position and that of my employees and associates. I would love to see salaries increase ahead of inflation for a change. So, therefore I say bring it on!!

eye.tea
eye.tea

...isn't that a kind of salary-fixing? Example: Matt works for Google and makes $100K. Twitter calls Matt and offers him $120K to come work for them. If Google and Twitter have agreed not to counter-offer each other's bids with higher amounts to eliminate bidding wars, Google can't offer Matt $125K to stay at Google, but can only offer Matt $120K to stay. Matt's choice is limited by the Google/Twitter agreement to $120K. Let me know if this argument is weak - I'm not sure. Matt could always counter either employer's offer, however, by demanding more. Depends on how replaceable he thinks his talent is, I guess.

BlueCollarCritic
BlueCollarCritic

The problem is it is one sided. If employees compared notes salaries and colluded to force employers to pay more there would be an uproar from the other side. The bottom line is that each side, employers and employees, have to play by the same rules and when Unions get involved it tips the scales to the side of the employee and when employers act unethically/illegally and collude it tips the scales to their favor; both are wrong! The bottom line fact that is undeniable no matter how hard pro-corporate sided people want to scream, corporations can NOT exist without employees but people CAN exist without corporations and they have done so for hundreds if not thousands of years before corporations came onto the scene. It would be hard if all corporations shutdown and people had to live off the land like they use to but humanity WOULD survive without corporations. The same CAN NOT be said for corporations. Even if all corporations replaced every worker with robots/automation they could not survive because they would then have NO customers. They???d have no customers because people would be forced to love off the land like our ancestors and so the days of going to the local Wal-Mart top by milk would be a thing of the past. I want to be clear that I am not anti-business??? I use to be an independent consultant. I currently love the company I work for. My issue is with the large corporations that don???t compete ethically and that cheat and steal from anyone/everyone to meet the next quarters projections. It is the current mentality of the ???grow the bottom line at all other expense??? that has help to screw everything up. The current business philosophy can only lead to failure because it assumes a never ending growth potential instead of focusing on profitability. A food franchise by the name of Chick-Fila (popular on the East Coast) has been successful in spite of tough times and in spite of being more expensive than its competitors and in spite of the fact that it does not do as everyone else does such as opening on Sunday (all stores are closed on Sundays including Mall locations). How have they done this? By NOT being like all others and instead focusing in on product quality (as opposed to product cost reduction), maintaining employee satisfaction (instead of finding the cheapest labor possible) and by measuring success not by now many stores it has or has added this year nor by how much it beat last year???s sales, but by making sure its costs are less than its sales so that everyone involved can make some money. Mega corporations/giants of all industry are on a path to failure because their leaders (the CEO and other board members) follow the elites philosophy of higher sales with lower pay and therefore are unable to wither the down times. I dare any pro-corporate fan to show how corporations can exists without employees and I don???t mean a single corporation but corporations as a whole. Its easy for 1 or 2 or even a few corporations to do it cheap and dirty but once enough go down that path like they have with offshoring jobs to China the will eventually find themselves without customers because their former customers are now without jobs and therefore without money. It???s a circle of life; customers to corporations to employees and both sides have to play ethically fair else we all loose.

bill.andersen
bill.andersen

You may not see it that way, but the fact is that they have no right to swap this kind of information in light of the privacy issues alone, never mind the ethics or lack of them. As far as i know this is still classed as private information and companies who indulge in it should be proscecuted and sued for it. It is both shameful and damaging to the employees who want to get on just as much as the companies and they have every right to do so.

adornoe
adornoe

because, collusion, to fix prices, or salaries, is still wrong in a free-market system. It's equivalent to insider trading, where someone gets an advantage from inside information towards the selling or buying of a stock. This discussion is not about unions, nor about greedy owners trying to get rich at the expense of the lowly employee. It's about trying to retain valuable assets in the form of highly talented employees. But, they went about it the wrong way.

AnsuGisalas
AnsuGisalas

This kind of agreement will always backfire. When corporations enter cartels to screw over the consumers, they eventually get edged out by more competitive companies, companies who don't need to cheat to win. The "safety" of the cartel leads to complacency and poor quality, and discourages employees from doing their best. When the serious competitor shows up on the scene, it's too late to regain a proper business culture. Same with companies that relies on corruption to get orders, they will get complacent, then crappy, then die. And with wage fixing, they'll stop bothering to keep their employees happy. A lot of highly talented people stay at their job because of the challenges and the sense of doing something unique and exciting. Wage fixing will lead to complacency and will mean top employees going to smaller companies looking for more meaningful work experiences and better chances of being fully appreciated. After all, having smaller wages at a startup is countered by the greater odds of cashing in on the company's success via stock ownership.

somethinggood4
somethinggood4

How is it that the "blue collar and lower-level white collar" workers are being cheated by employers who agree to keep their organizational costs down by NOT paying exhorbitant salaries to a handful of people? If these tech giants had to pay a handful of workers at the top huge amounts of money to stay, there would be less left over for the rank-and-file. Say goodbye to work-life balance, office perks, all the niceties of the Google corporate culture that are made possible by having more money in the coffers because they didn't have to pay it out to a single person. How is this *bad* for the rest of the workforce?

AnsuGisalas
AnsuGisalas

Unions are necessary because the employer holds all the cards, otherwise. And some (dumbass) employers will use that to exploit and abuse their workers. Without unions, many companies would pay a lot less wages to the average workers, which would starve the economy. Greedy _bastards don't think far enough ahead to realize that there's no _goddamned trickle-down effect, but there is one hell of a trickle-up effect. A million people earning 50$ extra / month will succeed in spending more money than an executive earning $50 million extra. And they'll do more good for the economy with that spending, than the idiot executive who spends half of the money on schemes to keep from paying taxes on the other half.

pmshah
pmshah

This is indeed funny. When you are talking about multi-million dollar packages there is no training involved nor are replacements available. Their past achievements have justified these packages. BTW I am just wondering if these companies came to this agreement simply because they hated paying out huge amounts to professionals of Indian origin? All the 3 named people are Indians. Does any one still wonder why India is the biggest beneficiary of off-shoring of high tech jobs?

WmTConqror
WmTConqror

When the worker thinks they are more important that the product (what the company is formed around) they are wrong. What you are saying is correct to a point, workers are an important component of any business. Keeping the employee's needs satisfied helps a company produce a product. The product is the purpose of the company. The product has to be sold at a profit for a company to survive. To sell a product at a profit requires control of a variety of cost put into the product. Labor happens to be one of them. If the product happens to be "idea" based (very little cost of material) the cost of labor is high compared to a product that is "material" based (labor could be more proportional to the amount of material / product created). The labor / any labor in America is free to pursue a job (qualified or not). There are organizations and regulations and requirements, etc that block labor from choosing a job deemed "dangerous" to the public good (you can't be an electrician or doctor for example without a license). A company has to weigh the value of a commodity, be it labor or raw material or a supplier based on a variety of things. If the commodity is "hot" it costs more. "Hot" could refer to marketing of the commodity. What that leads to is high-flyer salaries for a few "stars". They may jump from company to company, but if they don't succeed then they are either dumped or the company fails and takes a lot of people with it. CIO and "C" level people command the salary they get for a reason, they marketed their "commodity". They networked with people, made things happen at the company, and if they didn't they managed to move on. To fault someone for making as much as possible doesn't follow the logic of getting all the workers paid. Asking a company to take less profits so that the workers get a bigger share, doesn't really fit that logically either. Companies are and have to sell product at a price competitive in the market.

adornoe
adornoe

because, someone who would post what trust2112 did, has no understanding of how the private sector or the free-market works.

adornoe
adornoe

Look, employees are always free to move on, and they don't have to stay with a company. However, they should understand that, their days are numbered in a corporation that bids to retain them, because, the management and owners will remain leery about that "disloyal" talent, and thus, the company will from then on, be figuring out a way to replace the disloyal talent. The free-market system cannot be equated to employee decisions or to collusion to keep salaries and people in place. In the free-market system, a company exists to create wealth or to at least continue to exist and make enough money to pay its bills and salaries. Employees are used to help bring to fruition the ideas and ambitions of the owners and stockholders. The ideas and ambitions would remain in place if an employee were to leave, albeit, the work might end up being a bit tougher until the talent that was lost is replaced and those replacements come up to speed.

cidknee
cidknee

whats the difference with a greedy union sucking money out of people to "help the workers" Im sorry what unions fought for, is now law in most places. Time for them to go.

brockers
brockers

Your argument assumes a zero sum game which (at best) is a naive understanding market economics. The current state of compensation for application developers has created more "rank and file" millionaires than in any other industry, in any other market, in the history of the world. In no other industry (other than possibly professional sports) has pay been more directly reflective, though admittedly not perfectly reflective, of performance. If you really want to get a job that holds down top performers to the "benefit" of "blue collar and lower-level white collar" workers, I suggest you become a teacher and see how well that compensation system works out for you. Bobby

bill.andersen
bill.andersen

This is history, it has already happened. The answer is for companies to stop all this globalisation crap and just settle for a thriving company at local or national level where they get less profit and maintain a fair level of salary for all employees. Today, quality has gone down the plughole in favour of the mighty dollar and everyone has become way too greedy, wanting too much and living in homes that are way too big for their needs. The financial crunch/crisis was the wake up call folks, its time to start living within our means and try to be happy instead of encouraging all this greed!

mkficalora
mkficalora

In the study of economics and market competition, collusion takes place within an industry when rival companies cooperate for their mutual benefit. Collusion most often takes place within the market structure of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole. It is one thing for a company to keep its costs down by refusing to pay exorbitant salaries, but another thing entirely when several organizations collude to ensure that the market price is kept low. Their intent is not to balance life, or provide perks, but rather to insure technical intelligence stays where they want it. In a free market economy, supply and demand should dictate price. If the "handful of people" are worth the money, then they should be paid and the company and stockholders should accept the cost of doing business, not lay-off "rank and file" employees to ensure higher profits and dividends.

AnsuGisalas
AnsuGisalas

Gotta spend money to make money... it's especially true for cooperative systems like economies.

NickNielsen
NickNielsen

Now, answer this simple question: If the masses (workers) don't have it to spend, who is going to spend it? If you want to know the answer to that, study the economics of the Golden Age in America. I'll tell you this, if I'm making $50 million a year, I'm sure as hell not going to spend it all, but if I'm only making $50 thousand a year, that money is most likely [u]already[/u] spent.

AnsuGisalas
AnsuGisalas

It's Adornoe who's full of pent up hatred. If you want reason, reason. I'm up for that.

RipVan
RipVan

I ALWAYS like an argument filled with ugly hatred and condescension! Who needs REASON anymore...?

AnsuGisalas
AnsuGisalas

Wrong, and unthinking. As usual. You know, Hitler didn't have the support of Milton "Robber-Economy" Friedman, unlike Pinochet. Friedman's experiment in Argentina, wrong and unthinking as they were, also led to the formerly wealthy nation having it's economy destroyed by robbers who took Friedman's advice seriously. Look up "Synergy". And try to think a little, how is cheating employees out of fair compensation not helpful to synergy. Repeating, ad nauseam, tired pieces of re-chewed drivel, devoid of any critical thinking. You think it's ok for an employer to squeeze people out of a fair compensation for work done, just because they can. Fine. I hope it happens to you. But then, don't deny others their right to exercize the same control over supply and demand that the employers do. That's what a union is. And no, not all unions are corrupt. And no, in most countries unions are welcomed by employers, since they see a need for a negotiation partner, and see a need for an infrastructure that keeps their employees from starving during temporary slumps. And I don't expect you to field and argument, either, since you never do. Here's the scenario you failed to understand: A company is making a profit. It has a million employees, a CEO, and 50 million dollars to deal out in additional wages. A _stupid CEO gives the 50 million to himself, thinking that obviously he himself is responsible for all the product, since he's "overseeing" these employees of his. A smart CEO realizes that the employees, in actual fact, are more directly responsible for the product, and that future profits depend on the diligence and dedication of those workers, so he deals out the 50mil to them. In the first case the economy receives a de facto growth-creating investment of about 5 million $. Whereas in the second case, the economy receives a growth-creating investment of about 40 million$. Not to mention, that the company's future worth is more likely to grow through rewarding employees than through rewarding overseers. So, that's a simplified scenario (I don't expect you to understand it, still) and in reality we'll see more balanced choices. Your _idiotic conflation of fair compensation with communism or socialism or whatever isn't even worthy of comment. Luckily most capitalists disagree with you, you see, they've realized that giving completely in to personal greed is short-sighted and unsustainable, reducing future profits.

adornoe
adornoe

Pinochet would agree with you. Why not argue on points? Why trot out a dictator's name? I'm surprised you didn't use Hitler instead, or call me a fascist. That's the way the left always starts their arguments. But, asides from being ruthless in his governing, what was it that Pinochet did that irks you? Unions are necessary because the employer holds all the cards, Baloney! Unions aren't necessary at all. Most businesses are not unionized and most people are able to find work when times are not so bad, and most employees can get by without having to answer to a second set of "leaders" in performing their work. And, believe it or not, jobs are created by the corporations, and not by unions, and not by government. I'll bet that's something that you were unaware of. And some (dumbass) employers will use that to exploit and abuse their workers. "Dumbass"? Is that what you call those who create the jobs and who create the wealth? Dumbass is the government and the unions which have been killing jobs and sending them overseas. Try to engage whatever you have for a brain. Without unions, many companies would pay a lot less wages to the average workers, which would starve the economy. Actually, it's the complete opposite. The unions are the ones making products a lot more expensive with their high salary and benefits and pension demands. Without those demands, a great many jobs would still exist within our borders, and products and services would be a lot more affordable. Without unions, General Motors would still be a healthy private enterprise and so would Chrysler, and we would not have lost a lot of our manufacturing to overseas competition. Greedy _bastards don't think far enough ahead to realize that there's no _goddamned trickle-down effect, Those greedy bastards, are what created the greatest economy that ever existed, and it's with government intervention and the "GREEDY unions" that the economy has taken a dive and may never recover. Without unions, and without so much government intervention into the free-market system, we could be great again, with more jobs than we could fill and more prosperity than can be imagined. Instead of sending our jobs overseas, we could easily bring them back with keeping unions at bay and the government's grubby hands out of our economy. but there is one hell of a trickle-up effect. "Trickle-up" has never worked, and it's very illogical. When is the last time anybody got a job from a poor person. Do employees create work, or do employers create work? Tricle-down, though it may sound unpalatable to socialists and democrats, has always worked, and it's what created the booming years under the Reagan and Bush years. What we have now is the "stimulus" years, which has in actuality, killed hundreds of thousands of jobs, while not creating new ones. A million people earning 50$ extra / month will succeed in spending more money than an executive earning $50 million extra. However, where is the $50 extra going to come from? Thin air has never produced a single cent. The executives in charge of business, know how to create the jobs from which there actually will be people perhaps getting those $50 dollars extra to spend. Without those executives and without the wealthy and without the incentive to invest in the economy, the jobs would never be there and you might as well be talkig about North Korea or Venezuela or Cuba or China (believe it or not, the vast majority of Chinese are still living in deep poverty). And they'll do more good for the economy with that spending, It's been tried in the past. It's called socialism. It has ALWAYS failed, no matter where it was tried or when it was tried or by whom it was tried. The only economies that have ever been successful, are those that flow from the top down. Spending does drive an economy, and there is always more to spend in the private economy when government keeps more of business earnings and salaries in the hands of the people. Government has never been a good manager of an economy, and that's been the case in all of history. With businesses able to direct their own futures, growth and jobs have always been the result. When government and unions become involved in determining how a business is going to be run, the result has always been a decrease in productivity and loss of jobs. Those are incontrovertible facts. than the idiot executive who spends half of the money on schemes to keep from paying taxes on the other half. Use your head a little bit and you might discover how wrongheaded you are in you socialist views. Executives and the wealthy are what drive an economy. Not everybody is wealthy, but, those who run businesses will always create a more prosperous economy if they're allowed to keep more money in the companies' hands and in the hands of the investors. Money earned and kept is money that can be re-invested for more growth and more businesses and more jobs as a result. Even when a "greedy" executive or investor or owner keeps his earnings, it's not going to keep him "wealthy" if all that he's going to do is keep it in the bank or under his pillow. Money earned, no matter how obscene the amount, is always recirculated in the economy, because, those wealthy/rich/greedy people don't just want to collect money, they "re-distribute" that wealth. The spend that money. And their spending is at a much higher level than from the regular folks. However, they can't spend it all. They do reinvest and create businesses and jobs. Businesses and jobs are created in the private sector, and government functions and jobs are just an expense at the cost of the economy at large. Without the rich and their investments and spending, the economy would just simply shrink and eventually die, resulting in another Cuba or Venezuela or North Korea. The result of big government and of socialism and of "greedy" unions, is what we have been witnessing all over the U.S. over the last few years. We have been killing the "goose that laid the golden egg".

techrep
techrep

If a riveter makes $60 an hour I want to be a riveter....

adornoe
adornoe

Even if the talent in question is from abroad, it's quite possible that, someone with comparable talent within our country could demand more than that overseas talent, even if they get paid hundreds of thousands or millions. Why would a company "offshore" for comparable talent if that talent could be found here for approximately the same amount of money? Chances are that, the comparable talent here would, generally, demand a lot more than those "foreigners" or Indians. That's why there is a lot of "offshoring" to India. The same thing happens throughout many other industries, where, the talent overseas can do the same jobs as Americans, but for a lot less. Why pay a riveter $60/hour when a riveter in India or China is willing to do it for $1 or $2 or even $5 per hour? However, salaries are just a small part of the reasons why we "offshore" our jobs and plants and businesses. It's not as simple as lower salaries overseas.

ultimitloozer
ultimitloozer

When private companies have successful years, the bonuses go to those at the top, not the people who actually do the work that generates the profits.

mckinnej
mckinnej

Ryalsbane's got it right. You can see an expansion of the concept in bobp's reply below too. It's still a Free Market, but on a micro scale instead of macro.

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