[nabraham]

The story gets more interesting - the legal field is one of the few where salary information is totally transparent. If you know the law firm name and how long a person has worked there you can look up their salary. [1] Partner salary is also published, but only the average for all partners. In 1998 a group of lawyers started posting salaries in a Yahoo Group called Greedy Associates. [2] Many firms, upon seeing competitor salary information, felt the need to move in lock-step for fear of losing out top talent because of salary. This created a faster increase in lawyer salaries in the last 10 years then in any other time in history. In 1998 the firms that were paying $90K are now paying $165k. [3] Today, firms publish the data themselves so they can control the message.

Similar to lawyers, it would be interesting if instead of relying on Wealthfront and AngelList, engineers at Google, Facebook, Apple, etc started openly contributing their salary information to increase wages to 2-3x that of engineers at less selective employers and create this bi-modal distribution in tech.

[1] http://www.lawfirmstats.com/firms/ [2] https://books.google.com/books?id=IY4ieeVyer4C&pg=PA18&lpg=P... [3] http://www.bizjournals.com/phoenix/stories/1998/10/05/newsco...

[ghaff]

You seem to be postulating a pretty massive market failure if some incremental transparency around salaries at a few Silicon Valley firms would increase salaries to that degree.

It's a very different environment from law firms. Big, prestigious firms can pay first-year associates so much because they can bill them out to corporate clients in a way that the small-town lawyer who handles personal real estate transactions can't. I did some work for one of the well-known NY law firms a while back and the cost of the part of the project I was associated with must have been staggering. I know what I was paid and it was a lot and that was a tiny slice of the entire project.

By contrast, it's not clear to me why more salary transparency at Apple, Google, and Facebook would trigger this bidding war that would cause them to pay so much more than everyone else in the industry. After all, they're already considered desirable employers even with wages that are (I assume) somewhat above market but not ridiculously so.

[davidgerard]

> You seem to be postulating a pretty massive market failure if some incremental transparency around salaries at a few Silicon Valley firms would increase salaries to that degree.

We know for a fact there was massive market distortion by deliberate employer action; that would arguably have an effect similar to that of massive market failure.

[ghaff]

We know there was a lawsuit related to employer collusion that supposedly depressed salaries. How much is a matter of debate given that the salaries in question are pretty high by any measure. So I question whether there was a "massive" market distortion.

The parent argument was that a different form of what some might also call collusion--publishing salaries in the context of setting the going rate as large law firms apparently do--would instead massively (2-3x) increase salaries at those same firms.

[nabraham]

I'm not sure openly publishing salaries is collusion, which usually is a (secret) attempt by a few players to set prices for everyone. Like in the law firm example, all this affects only the top companies. Also, different structures can create economics outcomes that vary by 2-3x, no market failure needed. Take a look at a small example like Hired.com - firms openly bidding on engineers has resulted in salaries that seem to be 50-100% higher than those achieved absent such a structure.