Heroic, Possibly Insane Business Owner Raises Employee Minimum Wage To $70K Per Year
You never know what the future holds.
One day employees at Gravity Payments, a credit card processing company in Seattle, were sitting around, likely bitching about their compensation over some lukewarm breakroom coffee and the next they’re the recipients of a massive, company-wide raise.
All because owner Dan Price read a book on happiness.
It showed that, for people who earn less than about $70,000, extra money makes a big difference in their lives.
His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000.
“Is anyone else freaking out right now?” Mr. Price asked after the clapping and whooping died down into a few moments of stunned silence. “I’m kind of freaking out.”
If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year.
The paychecks of about 70 employees will grow, with 30 ultimately doubling their salaries, according to Ryan Pirkle, a company spokesman. The average salary at Gravity is $48,000 year.
I’ll be honest. I didn’t go to business school. But I figure there’s a reason every other company in the world is trying to get blood from stone and paying overqualified employees under-market value.
Something about a bottom line or something. Again. I’m not a business expert.
Long-term plan aside, Price seems like a stand-up guy.
“The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd,” said Mr. Price, who said his main extravagances were snowboarding and picking up the bar bill. He drives a 12-year-old Audi, which he received in a barter for service from the local dealer.
“As much as I’m a capitalist, there is nothing in the market that is making me do it,” he said, referring to paying wages that make it possible for his employees to go after the American dream, buy a house and pay for their children’s education.
It will be very interesting to see what happens to Gravity going forward. The sudden generosity is not likely to catch on in other parts of the country. Meaning: your job will still pay you less than you think you deserve.
But it’d be pretty awesome if this did become a trend.
I guess my most pressing question is: you hiring, Mr. Price?
[H/T: New York Times]