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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.
They like working for you... Who'da thunk?
So when the revolution comes and the rich bastards are being lined up for the firing squad, Gravity's CEO will be the *last* against the wall. In fact, we might even retain him because we need that kind of thinking after, to rebuild.
If telephones are outlawed, then only outlaws will have telephones.
It probably won't change much, do to inertia.
As long as his clients see the reward of staying with him as higher than the risk of moving to a different vendor, they will stay.
And happy employees are one factor in his favour.
Almost anything that increases worker retention and job satisfaction will be good for business.
So many companies have forgotten this. Including the one I now work for.
I am retiring in a few years. So to be a good employee, I hired a new college grad and spent the last 3 years training them as my replacement in a very complex semiconductor manufacturing data system.
Well, profits were good, but slightly lower than wall street expected this quarter...so they laid off my replacement (among others).
I am not going to spend my last three years here training another replacement. It takes years for a really intelligent person to learn this stuff. When I leave here there will be no one to do my job. Fuck 'em. I did what a good employee was supposed to do, in fact, had they laid me off I would have been fine. Happy even. But no, they had to screw over a bunch of young folks that should be the next wave of employees. I'm paid well, but I don't give a shit about this company any more. They don't seem to care about their future, so neither do I.
At least, according to Limbaugh.
This made me remember an old joke:
There was a cowboy and a carpetbagger riding on a train in the old west. At one stop, a beautiful lady boarded and sat across from the two of them. After a while, the salesman asked the lady, "Ma'am, would you sleep with me for ten dollars?" She paid him no attention.
After some time had passed, he asked again, "Would you have sex with me for twenty dollars?" She just stared at him, angrily. As did the cowboy.
Later, he asked, "Would you sleep with me for fifty dollars?" At this point, the cowboy stood up, drew his pistol and shot the man.
The lady addressed the cowboy, thanking him for defending her honor.
"Shucks, it wasn't that ma'am. I just didn't want some damned Yankee bidding up the price of prostitutes in Texas."
Rush Limbaugh answers to conservative business interest groups who need people like him to keep the blue collar working class entertained and distracted. Beer, football and occasionally beating the wife are all OK. But don't get any ideas about changing the economic status quo.
Have gnu, will travel.
The minimum wage in Australia is much higher... about $US15 per hour depending on which "accord" (industry) you are in. Having lived and worked in the US, Canada, and Australia, I can attest that minimum wage earners *work* about 4x harder than they do here. You see, hundreds of people line up for jobs that they then try to *keep*, since you earn about $US30k per year on them. (That is about the median US salary.) And the unemployment rate is comparable or lower, and the debt is less, in part because there is less need for social services. (Australia is one of the lower tax OECD countries.)
This situation arose by a law passed in the early 80s that made it illegal for unions to campaign for pay raises without showing an increase in productivity. Businesses, in turn, had to pass on some of the increased earning from productivity gains. All of a sudden, we have unions and businesses on the same page, with unions responsible for their own worker productivity, and the amount of hours-per-year lost from industrial action was an order of magnitude lower than any other OECD country.
Neoliberal economics gets a lot right, but there is a flaw in its theory surrounding labour law. People are not replaceable units, and workers are "sticky", in that they have families and other commitments. This is not true for some industries (like some types of internet work), but it is mostly true. This sets up a very big power differential between businesses and workers, and a type of "prisoners dilemma" where individual businesses act in a way that is helpful to themselves but detrimental to the aggregate.
Like all pain, suffering is a signal that something isn't right
My problem with these discussions is that people on both sides talk about "spending" as if all spending is fungible. In my experience it's not. Some things are smart to spend money on, other things are stupid to spend money on; and also it's very easy to spend money stupidly on things that are unquestionably necessary. It's one thing for everyone to agree that, say, defense is an important thing to spend money on; and yet another thing to assume that all defense spending is good.
I think it's quite possible for a country spend its way to solvency -- if it spent overwhelmingly wisely. It's also possible to economize your way to bankruptcy, if you cut overwhelmingly foolishly. Of course it's also possible to economize wisely or spend yourself into a crisis. I've seen every possible combination, both in the private sector and the public sector. Private enterprises can become uncompetitive when management is unwilling to spend the money it needs to compete.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Here in Seattle we have Dick's burgers which is very similar. $15+ wages. 401k 50% matching. $2,000 a year towards tuition or daycare. Paid vacation and sick leave. Paid volunteer hours.
What happens is that people take pride in their job and without constant churn they retain their institutional knowledge (yes there is knowledge on how to most efficiently work in any business). The result is increased productivity and decreased labor expenses.
They've been in business since the 70s and they still sell burgers for $1.30.