Earlier this year, a small Seattle-based payment processing company made headlines when its 31-year-old CEO made a rather jarring change to the company’s pay structure: Gravity Payments
would pay all employees, at a bare minimum, $70,000 annually. It was met with a variety of reactions, ranging from those who said CEO Dan Price was establishing himself as a working-class hero, to those who thought he was actively destroying the fabric of society as we know it.
The truth is, Price had read a study that said the optimal level of happiness can be achieved with an income at around $70,000, and decided that he was in a position to make a difference. So he acted on it — by cutting his own salary by 90%.
Now, with several months having passed, we’re beginning to see the fallout. Recently, a slew of articles and media attention has returned to Price’s company. But this time, it hasn’t been quite as positive.
“A Company Copes With Backlash Against the Raise That Roared,” reads a New York Times headline
. “CEO counting cost of £45,000 minimum wage decision,” says another, from The Telegraph
. Many others are circulating as well, all spelling doom for Gravity Payments, with Price’s minimum wage policy as the chief reason for the company’s issues. As these articles explain, the company did lose business — from clients anticipating fee increases, and others who didn’t want to be associated with what they felt was a political statement.
But lost in a whirlwind of “I told you so” is the fact that Price’s experiment hasn’t really failed. In fact, Gravity Payments is still chugging along. If you were to actually dig into the meat of the doomsayers’ arguments, it turns out that even though the company has lost a handful of clients, it’s signed on even more — so many more that it’s had to go on a hiring spree.
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