Here's an old WSJ article:
FTC Investigates Oil Firms Over Hiring, Wages
By THOMAS CATAN
Updated April 26, 2010 12:01 a.m. ET
WASHINGTON—The Federal Trade Commission is investigating whether the world's biggest oil companies colluded to suppress managerial, professional and technical employees' wages in ways that violated U.S. antitrust laws, according to people familiar with the matter.
The previously undisclosed probe has been open for several years and involves as many as a dozen oil companies, including Exxon Mobil Corp. XOM +1.63% , Royal Dutch Shell RDSB +0.39% PLC, BP BP +1.28% PLC and Chevron CVX -0.03% Corp, these people said. The probe remains active, they added, but the five FTC commissioners have yet to vote on the matter, and it is possible a suit will never be brought.
The investigation is the latest evidence of concern among U.S. antitrust enforcers that the nation's largest employers may be interfering with the labor market to hold down costs. The U.S. Department of Justice is carrying out a similar probe into whether companies in the technology sector have improperly agreed not to poach each other's employees, according to people familiar with that matter. A spokeswoman for the Justice Department declined to comment.
The oil companies and the FTC have discussed possible settlements over the course of the investigation but have failed to reach agreement, people familiar with the matter said.
I can't find anything more recent about this, so it may have fizzled out.
One general point I want to make is how bizarre "ExxonMobil" looks to an old-timer like me who can remember press and public paranoia against Big Oil in the 1970s and early 1980s. After all, Exxon is the direct descendant of the firm at the heart of the 1911 Standard Oil trust decision by the Supreme Court.
That a Democratic administration in the late 1990s would approve the mergers of Exxon and Mobil, BP and Amoco, and Chevron and Texaco was unthinkable 20 years before.
If six colossal companies suddenly turn into three supercolossal companies, economic theory predicts that it's now easier for the merged firms to exercise some degree of cartel power against their employees over pay: there are three fewer companies that might defect from informal arrangements.
A meta-general point: there were a lot of things 35 years ago that I turned out to be more or less right about. For example, it wasn't all that popular in 1979 to argue that Big Oil companies are not the chief locus of evil in the world.
On a lot of 1970s-1980s arguments, I turned out to be on the historically winning side. And that's great!
But ... here's the thing: diminishing marginal returns.
If the arguments in 1979 for smashing up and nationalizing the oil companies were, on the whole, bad, that doesn't necessarily mean we should, in effect, gut the Sherman Anti-Trust Act in 1999.
If the CIA needed to help undermine Russia's influence in Lisbon in 1975, well, that doesn't automatically mean that, on the whole, its all that crucial the CIA should do the same thing in Donetsk in 2014. It's 4,800 km from Lisbon to Donetsk by air. Sure, the Game of Nations never ends and all that, but we've built up a huge lead.
A meta-general point: there were a lot of things 35 years ago that I turned out to be more or less right about. For example, it wasn't all that popular in 1979 to argue that Big Oil companies are not the chief locus of evil in the world.
On a lot of 1970s-1980s arguments, I turned out to be on the historically winning side. And that's great!
But ... here's the thing: diminishing marginal returns.
If the arguments in 1979 for smashing up and nationalizing the oil companies were, on the whole, bad, that doesn't necessarily mean we should, in effect, gut the Sherman Anti-Trust Act in 1999.
If the CIA needed to help undermine Russia's influence in Lisbon in 1975, well, that doesn't automatically mean that, on the whole, its all that crucial the CIA should do the same thing in Donetsk in 2014. It's 4,800 km from Lisbon to Donetsk by air. Sure, the Game of Nations never ends and all that, but we've built up a huge lead.
The main reason air travel is so inconvenient, expensive, and customer unfriendly is the allowance for all the airlines to merge with each other.
ReplyDeleteIt was a lot more expensive before deregulation. But it was also a lot nicer. Coach back then was more like business class in terms of service.
DeleteSo your searching for old cartel/monopoly articles?
ReplyDeleteSowing the seeds of an up coming post on monopoly?
Doesn't the American ideal involve getting rich by starting your own business and not by working for someone else?
ReplyDeleteIf there's a petroleum geologist who is being oppressed by the monopsonistic oil companies maybe he (or she) should go out wildcatting.
'Wildcatting' sounds more American than 'I think my paycheck is too small. Oh well.'
The same BTW is for employees of Apple, etc. You don't like what Steve Jobs is doing to you? Well then be Steve Jobs.
What's with this employee-philia?
Yeah, if you want to be paid fully for being in the offshore oil drilling business, build yourself an offshore oil rig, haul it out to sea, and start drilling!
ReplyDeleteA friend's father, a former longtime Exxon engineer, had a nice second career consulting in the Middle East.
DeleteWhat with the KMeters? Are you a commie Steve?
ReplyDeleteHow far is it miles?
Are you sure that nationalizing oil companies is such a bad idea ?
ReplyDeleteOk, it doesn't work in Venezuela, but a lot of other things don't work there. Isn't it working out well in Norway though ?
AKAHorace
Lets first nationalize the cable and record industries and see how that works out.
ReplyDeleteHow far is it miles?
ReplyDeleteHow far is it in furlongs?
It was Chevron that merged with Texaco, not Shell. The resulting entity was called ChevronTexaco, but they've since dropped the "Texaco" part.
ReplyDeleteSteve had some good posts about fracking last year. Not many people understand how critical the oil business is.
ReplyDelete"Exxon" is a rebranding of Rockefeller's Standard Oil. The name was altered by corporate marketing jargon specialists in the 70's who thought "Standard Oil" had developed too many negative connotations.
Interesting that the company that was the biggest and most lucrative enterprise in the world in 1900 is still pretty much on top 115 years later.
Explosive growth in the oil and gas business is the invisible force that has renewed Russia's ability to bully its neighbors.
In the 1930s leftish intellectuals raved about Communism because of tremendous economic growth in the Soviet Union at the time, but really much of Soviet growth was just due to high oil prices and exploitation of newly discovered fields.
Just like in the 2010's an oil boom has made Texas look good, even though Tyler Cowen wants to give all the credit to wacky libertarian economics.
Esso (= S.O. = Standard Oil) is still used by Exxon in some foreign markets.
Deleteanony-mouse said... "The same BTW is for employees of Apple, etc. You don't like what Steve Jobs is doing to you? Well then be Steve Jobs.:
ReplyDeleteThe days of starting and building your own software company are long over. In the 80's-90's, people could have a viable business running small firm that could grow. Software projects are now too complex and need to be carefully managed theses days.
Facebook? Whatsapp? Klout? Etc.?
DeleteThis is currently occurring in the Canadian oil patch. Oil companies claim that there is an insufficient number of professionals for the scheduled volume of facilities pending design and construction and so have lobbied government to expedite the accreditation of "foreign-trained professionals" (mostly Indians and Pakistanis, peoples with a stupendous regard for scruple). Of course, oil companies complain about shortages in technical expertise as they actively offshore engineering to India and China. Funny, eh?
ReplyDelete"Yeah, if you want to be paid fully for being in the offshore oil drilling business, build yourself an offshore oil rig, haul it out to sea, and start drilling!"
ReplyDeleteOkay Steve, as soon as I get a few thousand dollars to spare in my bank account I'll get right on it. HaHaHa, I'm going to be rich, rich, rich!
Off topic, but Steve, how have you not been hired by the CIA yet?
ReplyDeleteThe Turkish government was just exposed as planning a false flag attack to justify a Syrian invasion:
http://www.reuters.com/article/2014/03/27/us-syria-crisis-turkey-idUSBREA2Q17420140327
http://www.zerohedge.com/news/2014-03-27/here-youtube-false-flag-attack-syria-clip-erdogan-wanted-banned
Keep up the phenomenal work. You're one of the only folks out there that seems to have a handle on what's going on in this crazy world of ours.
We could nationalize Hollywood. It could not possibly get any worse.
ReplyDelete@Viga Noot: WhatsApp begs to differ with you.
ReplyDelete@ Dave Pinsen:
ReplyDeleteEsso or Standard Oil sounds classier to me. Now it seems ironic they even changed their name in the first place. Who were they fooling? I guess they'd have to change their name every 5 years if they wanted to keep hiding from the sins of the past.
At the pace Facebook, Apple, and Google are going, they will drain away the value of their brands well Standard/Exxon ever did.
Viga Noot said...
ReplyDeleteanony-mouse said... "The same BTW is for employees of Apple, etc. You don't like what Steve Jobs is doing to you? Well then be Steve Jobs.:
The days of starting and building your own software company are long over. In the 80's-90's, people could have a viable business running small firm that could grow. Software projects are now too complex and need to be carefully managed theses days.
While this is true if you are trying to build something complex, smaller software companies are actually exploding in the indie game arena.
There have been many games recently done by small teams of 1-10 people that have done very well. There was recently a game on Steam that was done by only one person and was very popular.
There is even a documentary called Indie Game: The Movie that follows three very small teams who all made successful games.
Apps are along the same lines but not nearly as successful. In the top 100 lists for apps, something like 95/100 are done by already established big companies. With Flappy Bird being the obvious exception.
One thing to keep in mind with all this is that the private companies we all love to deride account for a relatively small piece of global oil production (sharply up thanks fracking). I believe it is something like 10%, and the rest is done by the massive state owned oil companies which are the norm in the world. Think Sinopec, Gazprom, Total, Statoil, Pemex, Petrobras, the various middle eastern and Southeast Asia countries..account for the other 90%. I could be wrong on the numbers of course, but that's my 5am memory.
ReplyDeleteIf free market conservatives had any sense - the genuine ones not the corporate shills - they'd realize the cartel capitalism we have currently is the rich version of socialism.
ReplyDelete.
"The Turkish government was just exposed as planning a false flag attack to justify a Syrian invasion:"
If they invade it'll be the Kurdish bits.
'Yeah, if you want to be paid fully from being in the offshore oil drilling business, build yourself an offshore oil rig, haul it out to sea, and start drilling'.
ReplyDeleteWhoa, Steve, there's still a lot of oil on land and people who have started very big energy businesses on their own.
www.forbes.com/sites/christopher helman/2013/03/04/americas-oil-and-gas-billionaires.
Why you yourself have mentioned T. Boone Pickens. And I'm sure you've heard of the Koch family.
Google 'Harold Hamm', 'Jeffrey Hildebrand', 'Dan Duncan', 'Robert Holding', 'Terence Pegula', and more.
All billionaires. None seem to be working in a cubicle for Exxon.
http://blogs.wsj.com/atwork/2013/04/29/and-the-highest-paid-college-majors-are/
ReplyDeleteHere’s the list of top 10 majors, with starting salaries:
Petroleum Engineering: $93,500
Computer Engineering: $71,700
Chemical Engineering: $67,600
Computer Science: $64,800
30% more than 2nd place? I wish my industry would collude against me like that.
"Anonymous said...
ReplyDeleteThere have been many games recently done by small teams of 1-10 people that have done very well. There was recently a game on Steam that was done by only one person and was very popular."
Games are for children. Our economy seems increasingly to be built around the interests of twelve year olds, whether they be twelve, or thirty.
"anony-mouse said...
ReplyDeleteDoesn't the American ideal involve getting rich by starting your own business and not by working for someone else?"
The American ideal is liberty. How is being a slave to a bunch of customers (as a small business owner) any better than being a slave to th company store?
JWS said: I guess they'd have to change their name every 5 years if they wanted to keep hiding from the sins of the past.
ReplyDeleteHunsdon said: Ask Blackwater. I mean, Xe. I mean, Academi.
Here’s the list of top 10 majors, with starting salaries:
ReplyDeleteIf you are lucky enough to find a job in that field once you graduate with the required degree.
The list of top salaries posted by commenter amendment xviii emphasizes the fact that technology and oil are the two hot businesses right now.
ReplyDeleteHiring competition has increased because everyone's doing well, therefore firms have a greater temptation to collude with one another.
"Here’s the list of top 10 majors, with starting salaries:
ReplyDeletePetroleum Engineering: $93,500"
One reason may be decreasing EROEI (Energy return on energy invested). Back in the day you could put up a derrick in Titusville or wherever, drill and find lots of oil - the energy return on the energy needed to build and run the derrick/drill was maybe 100-1. The gear was relatively cheap.
But the low-hanging fruit's been picked, and now the technology is very complex and expensive. Compare the cost of a rig/pipeline in the Gulf or North Sea with the cost of a straight-down derrick in Kuwait 50 years back. You now need
a) more engineers
b) more GOOD engineers because the costs of getting it wrong are greater. Ask BP.
Oil is expensive now because the costs of extraction are so much higher. Some of that money's going to stick to engineers.
It's not just the engineers getting rich. Every professional who touches oil tends to do well. For instance, the Big Four firms in Houston are in a constant headcount vortex because their people can make so much more working for oil companies. More to the point, it's probably the only major industry where you can make good money and not hate your life (looking at you, finance, law, and tech).
ReplyDelete