What happened as the recovery kicked in last year? Not much. IT salaries inched up by less than 2 percent in 2012, pushing compensation back up to January 2008 levels, according to a study by Janco Associates, a research company.
There's something else going on here -- and it's pretty ugly, says Ron Hira, a public policy professor at the Rochester Institute of Technology and researcher of tech immigration issues: "Large companies are collaborating with each other to keep salaries down."
A conspiracy to restrain tech wages
Sound extreme? Maybe paranoid? The U.S. Department of Justice doesn't think so. On Nov. 16, 2012, the DoJ's Antitrust Division filed suit against eBay, alleging that its senior executives entered into a "handshake" agreement with Intuit execs not to solicit each other's employees.
The complaint (filed in federal court in San Jose, Calif.) alleges that eBay's most senior officers "were intimately involved in forming, monitoring, and enforcing" an agreement with Intuit not to hire one another's employees, and this alleged agreement "harmed employees by lowering the salaries and benefits they might otherwise have commanded, and deprived these employees of better job opportunities at the other company."
Tellingly, this eBay/Intuit case isn't unique. In 2010, the DoJ filed a similar action against Adobe Systems, Apple, Google, Intel, Pixar, and Intuit. The defendants quickly settled without admitting wrongdoing. The DoJ noted in a press release that "cold calling" employees of a competitor is a widespread practice in the tech industry. By agreeing not to do that, the companies were working to keep wages down.
What's more, these wage-fixing schemes are closely related to the push for more H-1B visas. As I pointed out in my February post, most workers brought to the United States on H-1B visas work for outsourcers like HCL Technologies, Infosys, and Tata Consulting Services, as well as foreign affiliates of nominally U.S. companies such as Accenture, Deloitte, and PwC. Because they are here on the sufferance of their employers, those workers tend to be compliant and willing to work for wages that are lower than those paid to citizens. Because they have H-1B visas, they can't change jobs -- unlike a foreigner with a green card.
When confronted with statistics proving that the United States is producing a bumper crop of STEM grads, the apologists for Silicon Valley reply that in other countries a higher percentage of college graduates hold degrees in STEM-related fields. But that argument proves nothing, says Hira.
India's economy, for example, is very different than ours. Technology is one of the few areas that offer opportunities for the educated, so naturally Indian students flock to it. That's not at all the case in the United States, which, by the way, has a much higher percentage of the population going to college than India does, Hira adds.
We don't have a labor shortage or a STEM-grad shortage in the technology industry. What we have is a shortage of tech companies willing to play by rules that would reward their employees with a fair share of their enormous profits.
This article, "Silicon Valley is lying about the state of U.S. tech education," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.