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$70k Salaries Didn't 'Backfire'; Gravity Payments' Profits Have Doubled (inc.com)
AmiMoJo writes: In April, Dan Price, CEO of the credit card payment processor Gravity Payments, announced that he will eventually raise minimum pay for all employees to at least $70,000 a year. The move sparked not just a firestorm of media attention, but also a lawsuit from Price's brother and co-founder Lucas, claiming that the pay raise violated his rights as a minority shareholder. But six months later, the financial results are starting to come in: Price told Inc. Magazine that revenue is now growing at double the rate before the raises began and profits have also doubled since then. On top of that, while it lost a few customers in the kerfuffle, the company's customer retention rate rose from 91 to 95 percent, and only two employees quit. Two weeks after he made the initial announcement, the company was flooded with 4,500 resumes and new customer inquiries jumped from 30 a month to 2,000 a month.
Not long a pizza chain local to the Minneapolis area raised their starting wage to $11/hour and they've seen tangible rewards from doing this.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
While that is undoubtably a factor, as TFA acknowledges, the point is that the previous reports of it being a disaster are wrong. Two people left, and they attracted a lot of new talent, and the company didn't tank. The predictions of dire woe never came true.
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SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Right, because when you change one thing, everything else has to stay the same, otherwise things would get to complicated to discuss in a post like yours.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
First, per capita is not per worker. There are children, retirees, and even spouses that do not work.
Second, the US economy is closely tied to consumer spending, so giving a raise would boost the GDP. (Figuring out what the ratio of increased wages to increased GDP would be is left as an exercise for the student.)
The tiny increases in wage rates since the recession is an important factor in explaining why the GDP is expanding so slowly now.
The reason for $70,000 and not $70 billion is because the Princeton study he based the decision on said that making more than $75,000 didn't make people happier on a daily basis but that making less than $75,000 increase how unhappy people were.
Thus by decreasing his own salary and increasing the minimum wage at his company (but not completely eliminating the pay scale) he figured he could increase overall productivity while also being ethically responsible. It seems to have paid off.
Obviously that would differ depending on the cost of living in a region. I assume that number he quoted is specifically calculated for Seattle.