Dan Price, founder and CEO of Gravity Payments, shocked everyone last Monday, including his 120 employees, when he announced that he would raise the minimum wage at his credit card processing firm to $70,000 a yearAnd here is his reasoning...
In 2010, he read a study published by two Princeton researchers declaring the happiness tipping point to be roughly $75,000; the authors said anyone making much less would be prone to emotional pain and general dissatisfaction."That had a big impact on me," Price says. So much so that he started crunching numbers, hoping to figure out a solution for his own employees.Price is smart guy. He knows one study is not science. When was the last time you reorganized your life over a magazine article? So he cut his salary from $930,000 and raised his lowliest worker to $70,000.
Price, the New York Times reports, drives a 12-year-old-Audi and isn't much for extravagances. He told them he will slash his own salary from nearly seven figures to $70,000 in order to actualize his new definition of minimum wage. He also told the Times he plans to direct a large chunk of his company's estimated $2.2 million in profit this year towards salaries.Gravity is a credit card processing company, so he is an accessory to the banking industry. He won "Entrepreneur of the Year" (what is that?) award last year, which celebrated him mightily, so he has a tremendous PR machine.
Remember: property, paycheck, pension and portfolio are all forfeit in credit deflation. To cut his salary from $930,000 to whatever, and to distribute the estimated $2.2 million in profits is just to keep it from Uncle Sam.
The devil is in the details. What happens if competition not paying $70,000 a head beats him on proce in a commodity service business?
Watch insider transactions closely. He has mentioned he picked up new clients for this news, and perhaps he is primping for some untold move.
Charles Keating was notorious for paying his secretaries up to $250,000 a year (in todays dollars.) So yes, this may sound cynical, but sometimes you have to behave very cynically to do the right thing. Price may see the game is over, and is throwing out some crumbs (for how long does he actually need to cut checks in this amount to achieve his goals?) but this strikes me as yet another example of the smart escaping into anarchy from the chaos of hegemon.
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