Top Silicon Valley CEOs accused of wage theft

I’d guess that if I interviewed a typical Silicon Valley CEO, he’d say he opposed labor unions because wages should be set by the law of supply and demand.  This is conjecture, because I don’t know the views of individual CEOs, but I’d bet it was true.

I’d also bet that many of them buy into the view of certain economists that growing inequality in wages is due to the fact that the most talented workers command more of a premium over average workers than they did in an earlier era.

Be that as it may, Silicon Valley’s top companies – Apple Computer, Google, Abobe, Pixar, Intuit and Intel – are the targets of a class action lawsuit, and Hewlett-Packard in a separate suit, alleging that their CEOs conspired to limit the salaries of their most talented employees.

They allegedly agreed among themselves to refrain from recruiting each others’ employees, to share wage information and to punish companies that wouldn’t co-operate. All this is illegal, of course

Mark Ames of PandoDaily reported that court documents show how, in 2005, Apple’s Steve Jobs approached Google’s Eric Schmidt about a no-raiding agreement.  Schmidt reportedly told Shona Brown, his vice-president of operations, to keep no written record of the agreement because “I don;t want to create a paper trail over which we can be sued later.”  George Lucas was another early advocate of companies combining to limit wage increases.

The agreements allegedly affected 100,000 top engineers and tech workers, and cost them $9 billion in lost wages.


The Techtopus: How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages by Mark Ames for PandoDaily.

How George Lucas, Eric Schmidt and, yes, Steve Jobs Conspired to Reduce Wages of 100,000 Tech Pros by Yves Smith for naked capitalism.

How Silicon Valley Conspired to Pay Workers Less So CEOs Could Make More by Kevin Drum for Mother Jones.

California’s New Feudalism Benefits the Few at the Expense of the Multitude by Joel Kotkin.for NewGeography.   A good overview of  what’s wrong with California and its economy.

I think President Obama is to be commended for allowing the anti-trust suit to go forward, despite the financial support he and the Democrats got from California’s high tech and entertainment industries in their election campaigns.  You could argue that public servants should be expected as a matter of course to allow legal processes to go forward without political interference.  But as the record of George W. Bush and Karl Rove indicates, this cannot be taken for granted.

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