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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.
You're describing the Copenhagen area, except education is free. I like it here.
-- Make America hate again!
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.
While undoubtedly true, I'd rather companies use such things for PR than what you usually find them doing.
I don't think he did this in order to get the good PR, but even if he did, he made the world a slightly better place. Good for him.
Shachar
Yet another AC rant that misses the point, but I'll bite, if only for the benefit of the peanut gallery.
The point of this company's $70k minimum salary is an acknowledgement of the fact that every employee is valuable to the company, including the guy who cleans up your shit when you overflow the company toilet. If a position isn't vital to a business's operation, then there's no need for the position to exist. This has nothing to do with being lazy or entitled (nor is this about to become law, so don't soil yourself just yet). It's just a business owner who seems to have no interest in the usual M.O. of keeping as many employees as possible as close to poverty as possible.
Writhe your naked ass to the mindless groove.
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.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
I'll forgo the obvious "get off my lawn" jokes..
No, you don't have to buy the lifted truck. No, you don't have to buy a house (but if you do, $2400 a month is not ridiculous - especially compared with rents in that area that are more than that), but if you want to go to a four-year college, you will be paying $100,000. My state university charges $24,000 a year. For in-state students.
No, you don't have to have a smart phone, or a house with a bunch of land, or travel for vacation. You can live like a monk and be happy with the impenetrable amount of smug you have surrounding you, while your landlord fails AGAIN to fix your toilet. These things are not necessary, but they improve your quality of life. And that's really all people want, they want a salary that allows them to have a life that they enjoy outside of work.. and for there to be an "outside of work" where you won't get fired if you don't answer the phone from some idiot VP at 9PM harassing you because you're not still at work.
For so long, we've just accepted the fact that your corporate masters are living off the sweat of your brow, leaving you with little to show for it other than massive debt (which they also make money on by investing.) It's been so long that we don't recognize what an equitable work arrangement looks like anymore - the "social contract" that used to exist between a worker and his/her employer has been demonized as socialism and laziness. Wages stagnate while productivity and profits rise, and anyone that points out this fact is immediately attacked for being greedy, lazy and/or socialist.
The Millenials don't want anything that wasn't considered reasonable 40 years ago. They want a salary that they can live on, and they want to share in the success of their employer. These are not unreasonable things. Things have gotten so twisted that the dude offering this $70k minimum salary was repeatedly harassed by his peers in the business community - one of them actually said to him "If you pay your people that much, what incentive do they have to work hard?" The whole concept of getting what you pay for when you hire workers has completely fallen off the radar, because it would eat into the profits. No, these folks think that the less you pay someone, the harder they'll work. Which is bullshit. It should be the other way around, but we've all been convinced that this needs to continue so companies can be "competitive" (read: the CEO's third mistress wants another Porsche.)
Never underestimate the power of stupid people in large groups.
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
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.