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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forumsupdate on the boss who slashed his salary to pay all employees a minimum of $70K
In 2015, the boss of a card payments company in Seattle introduced a $70,000 minimum salary for all of his 120 staff - and personally took a pay cut of $1m. Five years later he's still on the minimum salary, and says the gamble has paid off.
After crunching the numbers, he arrived at the figure of $70,000. He realised that he would not only have to slash his salary, but also mortgage his two houses and give up his stocks and savings. He gathered his staff together and gave them the news.
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Since then, Gravity has transformed.
The headcount has doubled and the value of payments that the company processes has gone from $3.8bn a year to $10.2bn.
But there are other metrics that Price is more proud of.
"Before the $70,000 minimum wage, we were having between zero and two babies born per year amongst the team," he says.
"And since the announcement - and it's been only about four-and-a-half years - we've had more than 40 babies."
More than 10% of the company have been able to buy their own home, in one of the US's most expensive cities for renters. Before the figure was less than 1%.
"There was a little bit of concern amongst pontificators out there that people would squander any gains that they would have. And we've really seen the opposite," Price says.
The amount of money that employees are voluntarily putting into their own pension funds has more than doubled and 70% of employees say they've paid off debt.
But Price did get a lot of flak. Along with hundreds of letters of support, and magazine covers labelling him "America's best boss", many of Gravity's own customers wrote handwritten letters objecting to what they saw as a political statement.
At the time, Seattle was debating an increase to the minimum wage to $15, making it the highest in the US at the time. Small business owners were fighting it, claiming they would go out of business.
The right-wing radio pundit, Rush Limbaugh, whom Price had listened to every day in his childhood, called him a communist.
"I hope this company is a case study in MBA programmes on how socialism does not work, because it's going to fail," he said.
Two senior Gravity employees also resigned in protest. They weren't happy that the salaries of junior staff had jumped overnight, and argued that it would make them lazy, and the company uncompetitive.
https://www.bbc.com/news/stories-51332811
Wounded Bear
(58,656 posts)Nice story. My question, why is this in the BBCV and not US news?
ProfessorGAC
(65,042 posts)For all his other flaws, the business world thought he was crazy for more than doubling worker pay.
Then tons of those very workers could afford the cars they were building & Ford smoked the competition for quite a long time. Then the flaws...
Got too satisfied with the "T" and ignored Edsel. GM then ate his lunch.
dhill926
(16,339 posts)TexasBushwhacker
(20,190 posts)This IS NOT socialism. This is a boss who took a chance and decided that having happy employees who aren't struggling financially would be more productive and his company would grow faster and more sustainably. He sounds like a pretty happy guy himself.
mercuryblues
(14,531 posts)of employment is low. Which is a huge cost saver in itself.
TexasBushwhacker
(20,190 posts)That's one of the advantages Costco has over Walmart. Walmart's turnover is really high.
RhodeIslandOne
(5,042 posts)Fuck him.
live love laugh
(13,109 posts)Wounded Bear
(58,656 posts)not_the_one
(2,227 posts)He is obviously one of the good ones. He looks around, takes stock, decides what needs to be done, and does it.
And on top of ALL of that, (call me shallow) he is so fucking hot!!!
littlemissmartypants
(22,656 posts)Then we can go read it there when we feel down. ❤
ETA Link: https://www.democraticunderground.com/?com=forum&id=1267
Demovictory9
(32,456 posts)Greywing
(1,124 posts)was doing but couldn't remember his name or the company name. Thank you so much for this update.
malaise
(268,998 posts)Great story
Rec