Here's What Really Happened At That Company That Set a $70,000 Minimum Wage

[bigfield]

I skimmed the story--I really don't want to read Dan Price's life story--and this part stood out:



It appears that Price hasn't actually started paying employees a minimum of $70,000, yet.

The article is a puff piece about the righteous and reformed Dan Price. Please buy shares in Gravity Payments, please consider Gravity Payments for your merchant payment needs, etc.

Let's revisit this story again in 2.5 years when Gravity is actually doing what the headline says it's doing.

ETA: "...successful case study at Harvard Business School"? Come on.

The cited story appears to be from November 2015, so that would be before the fact.

Oops, I thought it was published recently. Now I look again I see the date's in the footer. My bad.


ETA; This more recent story from CNN says the $70k minimum wage starts in 2024.

Dan Price, the head of Seattle-based Gravity Payments, said Tuesday that all of the employees in the company's new Boise, Idaho, office will earn a minimum annual salary of $70,000 by 2024.

https://edition.cnn.com/2019/09/25/...mployee-minimum-salary-to-70k-trnd/index.html
https://gravitypayments.com/blog/new-digs-new-era-for-gravitys-boise-team/

So...it's still four years away?

 

[Jimmy Higgins]

I skimmed the story--I really don't want to read Dan Price's life story--and this part stood out:



It appears that Price hasn't actually started paying employees a minimum of $70,000, yet.

The article is a puff piece about the righteous and reformed Dan Price. Please buy shares in Gravity Payments, please consider Gravity Payments for your merchant payment needs, etc.

Let's revisit this story again in 2.5 years when Gravity is actually doing what the headline says it's doing.

ETA: "...successful case study at Harvard Business School"? Come on.

The cited story appears to be from November 2015, so that would be before the fact.

Oops, I thought it was published recently. Now I look again I see the date's in the footer. My bad.

THE FOOTER?! Assholes! I was looking at the URL because there was nothing up top. Who puts the date in the footer?!

 

[bigfield]

Who puts the date in the footer?!

Hipster web designers?

 

[barbos]

I honestly don't know how workers are usually paid in bill processing companies. I am not even sure what exactly do they do.
I suspect that credit card companies outsource bill sending to local processing centers, it saves them money on mail I suspect.
And the business is essentially printing presses/printers and workers are running it. They also process checks I suspect. Really, don't see the need for 4 years college, let alone PhD in check processing.

I would appreciate if you correct me if I am wrong.

Well, no. It's a tech company. I don't think there's any printing presses/printers involved at all, or any "runners", or any physical checks. Everything is done electronically. You basically have a bunch of engineers/ software people, then the standard business people like sales, marketing etc. Those people would be making at or more than 70k already. Then the support people, basically, people who deal with onboarding new customers, or helping existing customers that are having problems with your product.

Looking at their current positions, it looks like technical support analyst is one of the lower positions. These are the people that might have been paid something like 40-50k and are now making 70k.

But that isn't what I asked, I asked why you think that paying about 100 people 70k a year is so implausible. At least before COVID, their revenue was like 4 million a month. You act as if it is on its face absurd. That sounds like it might be cutting it close, but hardly impossible.

I did not say it was implausible, for all we know he could have been running a law firm.
What I said it was impossible to have universal $70k minimum

Also, what does education level have to do with it? Factory workers used to routinely make a comparable amount of money, adjusted for inflation, with only a high school diploma.

Unfortunately I has nothing to do with anything, and it is unfortunate in my humble opinion.
Do you think it's fair for high school fucker who has exactly zero chance of finding cure for cancer $80K and $40k to a postdoc who has non-zero chance of finding cure for cancer?

I know a couple guys who made 80k+ a few years out of high school after doing a technical certification, like HVAC, and working a couple years as a technician. By the time they were like 25 and I was barely finishing up grad school, they were making well into six figures and starting their own business.

I knew a guy who had exactly same education as me, doing basically the same job as I did, maybe 10 years senior and was paid 100x more than I was.

 

[J842P]

I did not say it was implausible, for all we know he could have been running a law firm.
What I said it was impossible to have universal $70k minimum

Ok, but you indicated several times that this person may not be paying everyone at their company at least $70k, as if it were implausible, which again, is not that much money in Seattle. The people who are probably doing really well are those in the Idaho offices. But again, the company is only about 100 people.

Unfortunately I has nothing to do with anything, and it is unfortunate in my humble opinion.
Do you think it's fair for high school fucker who has exactly zero chance of finding cure for cancer $80K and $40k to a postdoc who has non-zero chance of finding cure for cancer?

It sounds like the postdoc is getting ripped off, and that's because postdocs do get ripped off. Of course, postdocs should have probably known this before they went in to academia, and also, they should probably be doing something like, I don't know, organizing into a union. But most postdocs I've known see that sort of thing as beneath them, or are too wrapped up in their egos, or perhaps, too terrified to fail, to spend much time doing that.

At least in the life sciences, there is plenty of government money slushing around. But academia as a whole is pretty much this gross racket, and really, I don't see who else is supposed to solve that except the people in it.

I will also note, most postdocs have effectively zero chance of curing cancer. The ones that do have a non-negligible chance will often end up as a highly paid, full professor somewhere.

But all that doesn't mean a 'high school fucker" shouldn't be getting paid $80k for doing something like HVAC, because the job easily generates that much money. People hate cancer, but people hate being hot in the summer as well.

I knew a guy who had exactly same education as me, doing basically the same job as I did, maybe 10 years senior and was paid 100x more than I was.

If you don't mind me asking, this wasn't in some physics lab, was it? Because even though I know people get paid absolute shit in labs, but I didn't think anyone got paid 100x more than anyone else. I can see that in the private sector though.

 

[barbos]

I will also note, most postdocs have effectively zero chance of curing cancer. The ones that do have a non-negligible chance will often end up as a highly paid, full professor somewhere.

100% of professors went through being postdocs and most of the highly paid full professors have zero chance of finding cure for cancers.
So there is no real difference between postdocs and full professors.

But all that doesn't mean a 'high school fucker" shouldn't be getting paid $80k for doing something like HVAC, because the job easily generates that much money. People hate cancer, but people hate being hot in the summer as well.

It means market economy can't seem to deal with such distortions.

I knew a guy who had exactly same education as me, doing basically the same job as I did, maybe 10 years senior and was paid 100x more than I was.

If you don't mind me asking, this wasn't in some physics lab, was it? Because even though I know people get paid absolute shit in labs, but I didn't think anyone got paid 100x more than anyone else. I can see that in the private sector though.

I was paid in rubles (equivalent to $50/month) and he was on a contract basically loaned to Japanese lab and was paid regular Japanese $5k salary plus that regular russian $50 or in his case more in rubles.
Basically, if you did not get out of the country to make some money from time to time you were starving.
Now you know why I hate ..... Kardashians

 

[Loren Pechtel]

Workers are routinely exploited. Very few businesses pay more than they need to. It's virtually systemic. The whole idea of business is to keep running costs down in order to maximize profits.

And note that overpaying workers (in comparison to what they would make elsewhere) generally results in more exploitation of workers.

 

[DBT]

Workers are routinely exploited. Very few businesses pay more than they need to. It's virtually systemic. The whole idea of business is to keep running costs down in order to maximize profits.

And note that overpaying workers (in comparison to what they would make elsewhere) generally results in more exploitation of workers.

How do you mean?

 

[barbos]

Workers are routinely exploited. Very few businesses pay more than they need to. It's virtually systemic. The whole idea of business is to keep running costs down in order to maximize profits.

And note that overpaying workers (in comparison to what they would make elsewhere) generally results in more exploitation of workers.

How do you mean?

Stockholm syndrome

 

[barbos]

Anyway I think i understand what the company actually doing. Their clients are small shops which need to process shoppers's credit card in all forms. Relatively light programming but any kind of programming in US is above $70K. Sales monkeys I suspect normally not paid that much so if you limit their number and exploit them proportionally one can get everybody $70K

Not gonna work for Burger King.

 

[Metaphor]

From time to time, I see these stories about companies that offer some kind of wonderful perk for their employees, whether it be unlimited sick days, unlimited vacation time, no fixed hours, "choose your own salary", etc.

The problem with all of them is that they always come from a very particular kind of cloistered, upper middle-class, white-collar professional industry, often tech-related, and the perks that they dish out could never, ever generalise to the vast majority of workers, not even the vast majority of workers in high-paying professional positions. It matters very much the number of hours you do when you work at a cashier or you are seeing clinical patients. It matters very much when you work those hours, too.

 

[SimpleDon]

I marvel at the negative, instantaneous, visceral response when anyone mentions anything that hints at being an increase in the minimum wage.

It is as if it is a conditioned response, not one that comes from study and rational thought processes.

This is a case in point. There is nothing here that proves that a minimum wage is a good thing or a bad thing for even this firm or certainly for the economy in general. There is no reason to believe this minimum wage will doom the company or that it will make it a stellar performer in its field. Most likely the minimum wage will slightly improve employee loyalty and will reduce the company's recruiting and training costs by the same slight margin. Nothing more.

On both the microeconomic and the macroeconomic scale the question of how much to pay in wages usually comes down to a question of wages versus profits, not a question of wages versus product price as the negative, visceral response crowd believes. This is because while wages are a cost of production that determines the selling price of the product, so too is the profit a necessary cost of production.

This is especially true on the macroeconomic scale. Increases in wages across the whole economy reduces profits and decreases in wages increases profits across the whole economy. There is an extreme to both where further increases increases prices that show up as inflation in the economy. But this is a reason to moderate the year to year increases in wages or profits, not a reason to pursue one or the other. And the absolutely safe amount to raise either without increasing inflation is the amount of productivity gains that we have year to year.

There is no natural mechanism in capitalism that decides how much of the productivity gains go to profits and how much goes to wages. This is a function of how the economy is structured by the government. Our economy is increasingly structured toward allowing corporations to grow larger concentrating their markets allowing them more control over their prices and wages, with a corresponding reduction in the government's support for workers' collective bargaining power by virtually eliminating any support for labor unions in the private sector, largely because of the reluctance to enforce existing laws. As a result the gains from productivity increases has gone exclusively to increases in profits and none to wages starting in about 1980. Before then the gains from productivity were split 50/50 between increased profits and wages.

 

[skepticalbip]

According to Dan Price

Is there anything to say it didn't happen as reported?

The article was written in 2015 so everyone should be making at least $70k/yr. by now.
Glassdoor shows they are not...
https://www.glassdoor.com/Salary/Gravity-Payments-Salaries-E697633.htm

Seems that, as some here guessed, the announcement was likely a publicity stunt to get the company's name in the news and attract new business.

 

[barbos]

According to Dan Price

Is there anything to say it didn't happen as reported?

The article was written in 2015 so everyone should be making at least $70k/yr. by now.
Glassdoor shows they are not...
https://www.glassdoor.com/Salary/Gravity-Payments-Salaries-E697633.htm

Seems that, as some here guessed, the announcement was likely a publicity stunt to get the company's name in the news and attract new business.

Case closed.

 

[barbos]

I marvel at the negative, instantaneous, visceral response when anyone mentions anything that hints at being an increase in the minimum wage.

Dan Price is a liar.

 

[TV and credit cards]

The company has a 95% retention rate in an industry that averages 68%. Two people left due to this flat pay structure (sour grapes). A company called Necrosoft is doing the same with positive results.
It’s getting past the mindset of ‘with seniority comes higher pay’. Too often this does not come with more work or responsibility. It comes with less. It often means you get to sit on your ass and turn in progress and training reports while others do the hard work and look upon you with contempt. Sure this isn’t true for all but it is true for many. I see people in supervisory positions who’s asses are glued to their chairs. They do not even check on their subordinates work. They’re given the freedom to supervise themselves and do as much or as little as they deem necessary and choose to do little. Their only concern is if the work has been signed off on. This possibly eroding the quality of work and ultimately being harmful to the company.

 

[barbos]

TV and credit cards
But they are not doing it.

 

[DBT]

The article was written in 2015 so everyone should be making at least $70k/yr. by now.
Glassdoor shows they are not...
https://www.glassdoor.com/Salary/Gravity-Payments-Salaries-E697633.htm

Seems that, as some here guessed, the announcement was likely a publicity stunt to get the company's name in the news and attract new business.

Case closed.

Maybe. Yet the principle of fairer distribution of wealth stands as an undeniable issue.

 

[Loren Pechtel]

Workers are routinely exploited. Very few businesses pay more than they need to. It's virtually systemic. The whole idea of business is to keep running costs down in order to maximize profits.

And note that overpaying workers (in comparison to what they would make elsewhere) generally results in more exploitation of workers.

How do you mean?

Typically if you mistreat a worker too much they go to your competition. When the job pays better there's more incentive to stay and thus more tolerance of mistreatment. There's also the related issue of mistreatment in order to get such jobs. (Sleep with me if you want to be hired...)

 

[DBT]

How do you mean?

Typically if you mistreat a worker too much they go to your competition. When the job pays better there's more incentive to stay and thus more tolerance of mistreatment. There's also the related issue of mistreatment in order to get such jobs. (Sleep with me if you want to be hired...)

Not all workers have the luxury or option of 'going to the opposition.'

Nor is it necessarily a matter of being mistreated. Workers may be treated well, just poorly paid....with no option of going to the opposition in the expectation of sigificantly better pay.

The problem is systemic, with apparenty limitless money for those at the top of the heap, yet hardly a pittance for the bottom end....heaven forbid a 50 cent pay rise for minimum wage earners, the whole economy is gonna crash.