Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. He wasn’t thinking about the current political clamor over low wages or the growing gap between rich and poor, he said. He was just thinking of the 120 people who worked for him and, let’s be honest, a bit of free publicity. The idea struck him when a friend shared her worries about paying both her rent and student loans on a $40,000 salary. He realized a lot of his own employees earned that or less.
Yet almost overnight, a decision by one small-business man in the northwestern corner of the country became a swashbuckling blow against income inequality.
Continue reading the main story
Dan Price, C.E.O. of Gravity Payments, announcing the new base salary. “Is anyone else freaking out right now?” he said. “I’m kind of freaking out.”One Company’s New Minimum Wage: $70,000 a YearAPRIL 13, 2015
On April 13, Gravity Payments employees were told about a new pay policy.Praise and Skepticism as One Executive Sets Minimum Wage to $70,000 a YearAPRIL 19, 2015
Dan Price, C.E.O. of Gravity Payments, announcing the new base salary. “Is anyone else freaking out right now?” he said. “I’m kind of freaking out.” video New Minimum Wage: $70,000 a YearAPRIL 14, 2015
The move drew attention from around the world — including from some outspoken skeptics and conservatives like Rush Limbaugh, who smelled a socialist agenda — but most were enthusiastic. Talk show hosts lined up to interview Mr. Price. Job seekers by the thousands sent in résumés.
He was called a “thought leader.” Harvard business professors flew out to conduct a case study. Third graders wrote him thank-you notes. Single women wanted to date him.
But any plan that has the potential, as Mr. Price has put it, to “set the world on fire,” is bound to make some people squirm. Leah Brajcich, who oversees sales at Gravity, fielded complaints from several customers who accused her boss of communist or socialist sympathies that would drive up their own employees’ wages and others who felt it was a public relations stunt.
A few were worried that fees would rise or service would fall off. “What’s their incentive to hustle if you pay them so much?” Ms. Brajcich said they asked. Putting in 80-hour weeks after the announcement, she called the mistrustful clients, stopping by their offices or stores, and invited them to visit Gravity to see for themselves the employees’ dedication. She said she eventually lured most back.
When Mr. Price chose $70,000 as the eventual salary floor, he was influenced by research showing that this annual income could make an enormous difference in someone’s emotional well-being by easing nagging financial stress.
The new pay scale also helped push Grant Moran, 29, Gravity’s web developer, to leave. “I had a lot of mixed emotions,” he said. His own salary was bumped up to $50,000 from $41,000 (the first stage of the raise), but the policy was nevertheless disconcerting. “Now the people who were just clocking in and out were making the same as me,” he complained. “It shackles high performers to less motivated team members.”
Pop’s Pizza aside, Mr. Price’s plan is not easily replicated, said Nick Hanauer, a Seattle venture capitalist and an early promoter of the city’s $15 minimum wage law. Still, he noted, “These individual acts can create a new kind of perception of what’s possible and what’s righteous.” After all, he said, two years ago, no one would ever have guessed higher minimum wage laws would be catching fire in cities around the country. “Who can tell what that last thing is that catalyzes big change?”
In that sense, Mr. Price’s foray into the public debate on wages is not unlike his newfound passion of wake surfing. Cruising atop the curl of a wave created by a motorboat isn’t easy. Lean too far ahead of the swell or drift behind it and you wipe out. For the moment, he is balancing on the crest, enjoying the ride and doing his best to keep from falling off.