Dan Price raises minimum wage at his company to $70,000 a year

[RavenSky]

Surprised there isn't a thread on this yet:

The idea began percolating, said Dan Price, the founder of Gravity Payments, after he read an article 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 Monday afternoon, when Price surprised his 120-person staff by announcing 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 $70,000.

Price, who started the Seattle credit-card-payment processing firm in 2004 at age 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.

He said he planned to keep his own salary low until the company earned back the profit it had before the new wage scale went into effect.

http://www.seattletimes.com/business/seattle-firm-raising-pay-of-all-staffers-to-minimum-70000/

The OWS affect?

 

[dismal]

Sounds like he's running a charitable effort. His money, his choice.

 

[Tigers!]

How do I get a job at his place?

 

[Nice Squirrel]

Sounds like he's running a charitable effort. His money, his choice.

Do you have something against an employer paying their employees what they think they are worth?
Or do you believe that all wages are charity?

 

[dismal]

Sounds like he's running a charitable effort. His money, his choice.

Do you have something against an employer paying their employees what they think they are worth?
Or do you believe that all wages are charity?

Again: his money, his choice. Read carefully and you will see this contains no objection.

But I'm not sure why you believe he thinks they are worth $70,000. He has not been and is not paying them that currently.

 

[Nice Squirrel]

Do you have something against an employer paying their employees what they think they are worth?
Or do you believe that all wages are charity?

Again: his money, his choice. Read carefully and you will see this contains no objection.

Translate: "Now I don't have any objections..."

But

Wait for it...

I'm not sure why you believe he thinks they are worth $70,000. He has not been and is not paying them that currently.

Translation: "Here's my objection."

 

[credoconsolans]

If only all senior execs and CEOs took a hit, they'd have less turn over, happier employees and a stronger economy in which to do business.

 

[RavenSky]

I particularly liked this part:

...his unusual proposal does speak to an economic issue that has captured national attention: the disparity between the soaring pay of chief executives and that of their employees.

The United States has one of the world’s largest pay gaps, with chief executives earning nearly 300 times what the average worker makes, according to some economists’ estimates. That is much higher than the 20-to-1 ratio recommended by Gilded Age magnates like J. Pierpont Morgan and the 20th-century management visionary Peter Drucker.

“The market rate for me as a CEO compared to a regular person is ridiculous. It’s absurd,” said Price...

 

[RavenSky]

Again: his money, his choice. Read carefully and you will see this contains no objection.

Translate: "Now I don't have any objections..."

But

Wait for it...

I'm not sure why you believe he thinks they are worth $70,000. He has not been and is not paying them that currently.

Translation: "Here's my objection."

Dismal's objection is the typical nonsense we always hear when discussing wages in the U.S.: ordinary working people aren't worth the salaries they are paid - no matter what those salaries are. No one is worth minimum wage, no one is worth $70,000 a year. The only people who are ever worth their salaries in the minds of some are the CEO's making 300 times the average worker. t is a sick twisted POV in my opinion.

I applaud Dan Price. He is a hero in my eyes. I hope he is an inspiration to other CEO's.

=====================================

Maybe it is my Pollyanna heart, my 60's flower child youth, my wishful thinking - but I really do feel like the progressives are starting to come back in the U.S. The resurgence of renewable energy, green building, local farming, small businesses. Occupy Wall Street, the rising outcry against police brutality, people like Dan Price, companies that are including green and/or charitable initiatives as part of their business model. I think the tide is turning.

 

[thebeave]

It will be interesting to see how this little experiment works out. Let's be sure to check back in a couple of years to see how things are going.

I don't know what the workforce make up is, but if the night janitor with no real skills and speaks no English is going to be making the same salary as a college degreed computer programmer or accountant, then I suspect there could be problems. I would think there would be some resentment there...possibly to the point where the skilled, educated workers are going to leave en masse. I know I worked my ass off at a tough college for 5 years to get a physics degree, and if I was making the same salary as the lady working the copy machine, it would be a bit annoying.

BTW: I do like the fact that he lowered his salary. I wish more CEOs would do stuff like that.

 

[KeepTalking]

It will be interesting to see how this little experiment works out. Let's be sure to check back in a couple of years to see how things are going.

I don't know what the workforce make up is, but if the night janitor with no real skills and speaks no English is going to be making the same salary as a college degreed computer programmer or accountant, then I suspect there could be problems. I would think there would be some resentment there...possibly to the point where the skilled, educated workers are going to leave en masse. I know I worked my ass off at a tough college for 5 years to get a physics degree, and if I was making the same salary as the lady working the copy machine, it would be a bit annoying.

BTW: I do like the fact that he lowered his salary. I wish more CEOs would do stuff like that.

Given that he mentioned his lowest paid employees were clerks, customer service reps, and salespersons, I would assume his company rents office space, and is not employing the cleaning staff directly. On the other hand, this does mirror what I have heard from some people who currently make around $15/hr, with regard to raising the minimum wage to that amount. I have heard complaints that if a burger flipper at McDonalds makes nearly the same amount as they make, that somehow devalues their salary. My response is that they are free to quit their office job, and go take a shitty job at McD's if that minimum wage hike ever happens, or make the case to their employer that they should get a raise to keep them from leaving to pursue an exciting career in fast food.

I just don't get the attitude of begrudging someone else for making the same amount of money as you do, just because you perceive their job to be less valuable than yours. Everyone deserves to make a living wage or, as the case may be, a wage that increases their happiness.

 

[Nice Squirrel]

My boss is currently lamenting the lack of applications for our open position here. It is advertised at $14/hr. New hires will make $19/hr... Yes, we have lots of turnover.

 

[dismal]

Translate: "Now I don't have any objections..."

But

Wait for it...

I'm not sure why you believe he thinks they are worth $70,000. He has not been and is not paying them that currently.

Translation: "Here's my objection."

Dismal's objection

Repeat: dismal has no objection to him spending his money any way he wants. He could spend it all on booze and whores for all dismal cares or even waste it.

 

[Jimmy Higgins]

Translate: "Now I don't have any objections..."

But

Wait for it...

I'm not sure why you believe he thinks they are worth $70,000. He has not been and is not paying them that currently.

Translation: "Here's my objection."

Dismal's objection

Repeat: dismal has no objection to him spending his money any way he wants. He could spend it all on booze and whores for all dismal cares or even waste it.

Yup, Mr. Passive Aggressive is fine with this.

 

[Alcoholic Actuary]

It will be interesting to see how this little experiment works out. Let's be sure to check back in a couple of years to see how things are going.

I don't know what the workforce make up is, but if the night janitor with no real skills and speaks no English is going to be making the same salary as a college degreed computer programmer or accountant, then I suspect there could be problems. I would think there would be some resentment there...possibly to the point where the skilled, educated workers are going to leave en masse. I know I worked my ass off at a tough college for 5 years to get a physics degree, and if I was making the same salary as the lady working the copy machine, it would be a bit annoying.

BTW: I do like the fact that he lowered his salary. I wish more CEOs would do stuff like that.

The part I bolded is what everyone at the company should be focusing on. Accountants ought to recognize that they are making as much or more than their CEO and not worry about what clerks are making.

aa

 

[Ford]

It will be interesting to see how this little experiment works out. Let's be sure to check back in a couple of years to see how things are going.

I don't know what the workforce make up is, but if the night janitor with no real skills and speaks no English is going to be making the same salary as a college degreed computer programmer or accountant, then I suspect there could be problems. I would think there would be some resentment there...possibly to the point where the skilled, educated workers are going to leave en masse. I know I worked my ass off at a tough college for 5 years to get a physics degree, and if I was making the same salary as the lady working the copy machine, it would be a bit annoying.

BTW: I do like the fact that he lowered his salary. I wish more CEOs would do stuff like that.

The part I bolded is what everyone at the company should be focusing on. Accountants ought to recognize that they are making as much or more than their CEO and not worry about what clerks are making.

aa

I'd say everyone at the company should be (and probably will be) focusing on the fact that their CEO actually gives a shit about them. If you're the accountant, then you know he's not just paying you 70k because that's the going rate he's got to match so you won't leave. If you're the clerk, then you know he's paying you 70k because he values you that much. It remains to be seen if he can maintain this pay scale, but I'm willing to bet that every single one of his employees (assuming he treats them well in other areas) will go to the mat for this guy.

Of course the clerk isn't going to find another job that pays that much, but if you're the accountant in question, would you leave a great job with a great boss for an uncertain future at a firm which can beat your salary by a few thousand a year? I wouldn't.

Although the money is grabbing the headlines, this is also about corporate culture. I bet there's people lining up to apply to this company, and they'll be left wanting because nobody's going to want to give up their job. Not because of the salary, but because of the fact that when the quarterly numbers go down a bit jobs won't be on the chopping block so that management can hit budget and make their usual bonus.

 

[Nice Squirrel]

Not to mention he will have some great applicants to choose from.

 

[Earl IV]

Perhaps I missed something but I read it as $70,000 minimum.

I see no reason someone with higher skills/better education couldn't be paid more than the base salary.

 

[Rhea]

Yes, I look forward to seeing how this goes. My expectation is that it will go well, very very well. Maybe I'm wrong. I look forward to someone finally doing the experiment that I think has been warranted all along.

 

[dismal]

Not to mention he will have some great applicants to choose from.

Why does this matter? It does not appear he is actually trying to make money by doing this. He's tapping into his profits and his salary which is essentially also his profits. It seems pretty silly to try and justify as if it is sound business. It's charity.

He could give his money to the homeless or to a museum or spend it on booze and whores but he has chosen to spend it on above market salaries for his employees.