"People are starving or being laid off or being taken advantage of so that somebody can have a penthouse at the top of a tower in New York with gold chairs," he said of economic inequality.
In 2015, Dan Price — the boss of a card payments company in Seattle — did something no CEO in history would even dream of doing. He took a pay cut of $1 million to introduce a $70,000 minimum salary for all of his 120 staff members. Although many praised him for having taken such a huge and unprecedented step, there were others who ridiculed the move as unsustainable. Five years later, Price had a powerful message for all the doubters and naysayers: His company is thriving and he has the receipts to prove it.
Taking to Twitter earlier this month, Price revealed exactly how raising the minimum salary of all his employees has impacted his business. When I started a $70k minimum wage for my company in 2015, Rush Limbaugh said: "I hope this company is a case study in MBA programs on how socialism does not work, because it's gonna fail," he tweeted. Since then our company tripled & we're a successful case study at Harvard Business School. Since my company started a $70k min wage in 2015: Our business tripled, staff who own homes grew 10x, 401(k) contributions doubled, 70% of employees paid off debt, staff having kids soared 10x, turnover dropped in half, 76% of staff are engaged at work, 2x the national average.
Speaking to BBC earlier this year, Price revealed what inspired him to take the unorthodox step of taking a pay cut himself to raise the minimum pay for his staff. He explained that he was hiking with his friend Valerie in the Cascade mountains when she confided in him that her life was in chaos. Her landlord had increased her monthly rent by $200 and she was struggling to pay her bills despite earning around $40,000 a year.
This revelation made Price angry as Valerie — who he had once dated — had served for 11 years in the military, done two tours in Iraq, and was now working 50 hours a week in two jobs to make ends meet. "She is somebody for whom service, honor, and hard work just defines who she is as a person," he said. Although he was initially angry that the world had become such an unequal place, Price soon realized that he was part of the problem. A millionaire at 31 years of age, his company, Gravity Payments, had about 2,000 customers and an estimated worth of millions of dollars.
Talking to Valeria made him realize that many of his employees might be going through the same struggle. "People are starving or being laid off or being taken advantage of so that somebody can have a penthouse at the top of a tower in New York with gold chairs," Price said of economic inequality. "We're glorifying greed all the time as a society, in our culture. And, you know, the Forbes list is the worst example - 'Bill Gates has passed Jeff Bezos as the richest man.' Who cares!?"
Since increasing the minimum wage, Gravity Payments has seen an incredible transformation. The headcount has doubled and the value of payments the company processes has gone to $10.2 billion from $3.8 billion. "Before the $70,000 minimum wage, we were having between zero and two babies born per year amongst the team. And since the announcement - and it's been only about four-and-a-half years - we've had more than 40 babies," Price revealed. "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."
Our company faced 50% revenue loss. We did 0 layoffs. Employees volunteered temporary pay cuts.— Dan Price (@DanPriceSeattle) August 21, 2020
5 months later, our staff responded with record sales, all pay cuts were paid back & we're doing great
Amazing what treating your employees like people can dohttps://t.co/tWXleaYLrC
Although Price himself is still on Gravity's minimum salary today, he claims he's more fulfilled than he ever was. "There [are] tests every day," he said. "I'm the same age as Mark Zuckerberg and I have dark moments where I think, 'I want to be just as rich as Mark Zuckerberg and I want to compete with him to be on the Forbes list. And I want to be on the cover of Time magazine, making lots of money.' All these greedy things are tempting. It's not like it's easy to just turn down. But my life is so much better."