Is a Silicon Valley Hiring Cartel Forcing Down Wages?

Moneybox
A blog about business and economics.
Jan. 15 2014 1:34 PM

Is a Silicon Valley Hiring Cartel Forcing Down Wages?

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And then we formed a cartel to push down wages—hilarious!

Photo by Justin Sullivan/Getty Images

A group of 60,000 Silicon Valley workers got clearance today to move ahead with a lawsuit based on an explosive allegation that Apple, Google, Adobe, and others have formed a hiring cartel that drives down wages. Specifically, the accusation is that these firms have an agreement not to poach each other's employees.

If true, this seems like a very clear violation of existing antitrust laws. The ruling today doesn't speak to the merits of the case. Instead District Court Judge Lucy Koh gave the go-ahead for this to be pursued as a class-action case, which creates a more favorable legal environment for the plaintiffs. It'll be interesting to see what facts come out as this goes forward. Apple was involved in a pretty blatant form of cartel formation around e-book pricing a couple of years back, so it does seem as if the corporate culture over there isn't very concerned about these kind of legal liabilities.  

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.