It drives down wages by attracting a glut of workers to the industry, aids with lobbying for favourable immigration policies (e.g. indentured labour) and so on. It’s not just what we call tech either; this happens all across STEM.
Many reasons, but the most basic factor is topline revenue: American tech companies earn revenue from both their local market as well as a huge swathe of the world. Without large enough topline revenue, the companies wouldn't have the ability to offer high wages to engineers.
If you work for companies with smaller or less wealthy target markets, they simply won't be able to pay you as much (even if they wanted to).
There's also the culture of compensating talent well, the dynamic startup scene that drives demand for tech workers, and high costs of living in key tech hubs driving up baseline pay. Those help justify paying out a greater chunk of overall revenue to tech workers.
I think your edit hits the nail on the head in regards to higher salaries attracting more people to the profession. I've posted about this a few times here on HN if you care to look at my comment history but basically the efforts our politicians and our bosses go through to bring in foreign workers and suppress wages results in signalling to potential entrants into the tech employment market. If you take a smart person (which we've acknowledged tech workers are, because gosh, we need to drink from the global talent pool to find such smart people), and they have many options including protected professions that are definitely more lucrative and don't have any of this downward pressure, what choice do you think this smart person would make?
I am sincerely having difficulty parsing your argument.
I think you are saying:
1. Despite the news articles, tech workers by and large are underpaid.
2. Some exceptions to 1 exist that are sufficiently large and outsized that they are carrying the average. After discounting those individuals, tech wages are below what they should be.
3. Free trade and H1B visas are allowing large numbers of non-US tech talent into the hiring supply; this is driving down wages at the expense of the American tech worker.
4. Regardless of the fact that the supply of these workers is driving down wages as econ 1 would dictate, actual market wages should be much higher, because... (this is where I’m losing you)?
It doesn’t help that tech salaries outside the US are so low. I don’t know if that’s union related but relatively high salaries lead to higher contentment.
Not sure how exactly they are planning on "luring American tech workers" when they are paying much less on average, taxes are higher and real estate prices in large cities where these jobs are typically at are pretty insane compared to most of the US.
This is a bit hand wavy... isn’t current comp due to a handful of tech companies that became very profitable very quickly, and a lot of venture capital money? Without either of these two factors I doubt wages would be at the same level.
Tech pays a lot because there's a lot of money in tech. Most people in tech are underpaid relative to the value generated, in part because a lot of people enjoy working in tech.
Having a few large companies that have colluded to keep salaries down by having no poaching agreements doesn’t seem it’s good for tech workers. Having a bunch of companies and a competitive labor market is much better for tech workers.
Google pays for on-call hours. You are credited with 33.3% time for each hour on call if you have a 30 minute response requirement, and 66.6% time for each hour on call if you have a 5 minute response requirement. These can be taken as extra holiday, or cashed out. [0]
That's one way of looking at it. The other way of looking at it is that the tech sector is one of the most profitable sectors in the US economy that rakes in millions per developer. The salaries are high because they should be: the companies are raking in record profits, why shouldn't the employees see some action?
This article seems to implicitly characterize it as a positive, but the lower cost of business in the Toronto tech scene is subsidized by low wages for tech workers.
As the article states, the talent and diversity of education is top-notch, but the compensation is yet to match—Toronto tech workers need to demand higher wages.
By depressing tech wages, workers are forced out of big tech companies and into smaller companies with competitive salaries but fewer open positions.
Big companies complain they can't find enough workers with their relatively low wages, and lobby for more H1b worker visas, depressing wages even further as foreign workers cannot change companies easily without moving back to their native countries first.
I can totally imagine Steve Jobs writing that email over "no poaching" to the other big tech companies.
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