Let’s remember when Dan Price announced he was raising the minimum wage at Gravity Payments to $70K/year, on this day in 2015 (April 13)
Four years ago today, Dan Price, the CEO of credit card payment processor Gravity Payments, announced to his 100+ employees that within three years, everyone who works for his company would be making a minimum wage of $70,000 year. He would reduce his own salary to $70K, down from $1.1 million. It generated a lot of good press, with Inc. magazine putting Price on the cover and asking if he’s “the best boss in America?”
Things were rough at first, Price’s brother, who he co-founded the company with, sued; a few top employees quit when the meritocracy they benefited from collapsed; and the owners of Seattle’s most expensive restaurant whined about this, and having to pay a $15 hour minimum wage themselves, to the New York Times. Those things contributed to a very real worry that Price’s generosity would be the company’s undoing.
In hindsight, though, that doesn’t appear to be the case and Gravity is thriving. It looks like a test case for capitalism that paid off for Price and his employees. When Nicholas Kristof of the New York Times followed up with Price and Gravity last year, he found:
Business has surged, and profits are higher than ever. Gravity last year processed $10.2 billion in payments, more than double the $3.8 billion in 2014, before the announcement. It has grown to 200 employees, all nonunion.
The pay raise also helped attract new employees — including some who yearned to join a company with values. Tammi Kroll, a Yahoo executive, took an 80 percent pay cut to move to Gravity, where she is now chief operating officer.
Good job, Gravity and Dan Price. Where can I send my resume?
For further reading:
In April 2015, Dan Price, CEO of Gravity Payments, raised the minimum wage to $70K. The bold action had a positive…gravitypayments.com
A small Seattle company shows that capitalism can have a heart. SEATTLE - Staff members gasped four years ago when Dan…www.nytimes.com