How would you like to work for a company where the minimum wage is $70,000 a year? Most people would like a job like that. The employees of Gravity Payments don’t have to do wishful thinking because they do work for a company like that. The New York Times reported that Dan Price, CEO of Gravity Payments, surprised his 120 employees by letting them know that the minimum wage for any employee will be $70,000 a year.
Price started the Seattle-based credit-card payment processing firm in his dormitory room at Seattle Pacific University with seed money from his older brother in 2004, when he was only 19-years-old. Price, now 24, makes close to a million dollars a year. He thought it was too far of a gap between his salary and the people making much less. Therefore, he is bridging the gap by cutting his salary to $70,000 a year and giving the remainder of his own salary to his employees. That means some of his employees will actually make more money than he does, but he is fine with that.
Fox News reported that Price will cut his nearly $1 million salary to $70,000 and use about 80 percent of Gravity Payments’ anticipated profit of $2.2 million to increase the salary of about 70 of his employees. The 30 lowest-paid employees include customer service representatives, receptionists, clerks, and salesmen. They will see an increase in their salaries to the $70,000 minimum. Up to this point, the average salary at Gravity Payments had been $48,000 a year. Price said he plans to keep his own salary low until the company earns back the profit it had before the new minimum salary of $70,000 for all employees became effective.
The CEO of Gravity Payments explained his reason for making this decision. He said he read an article on happiness that said extra money for people who earn less than $70,000 a year makes a big difference in their lives. He surprised all of his employees with the news that over the next three years everyone’s salary will be a minimum of $70,000 a year.
Employees were shocked and surprised all at the same time when they heard the good news. They agreed the extra money would come in handy to do some of the things they needed to do, such as paying off outstanding doctors and hospital bills. Some said they would be able to better provide for their families. Most agreed that the extra money will definitely make a big difference in their lives.
Do you think other CEOs will follow the example of Dan Price and do something similar for their employees?
[Image via Getty Images]