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Meet The CEO Who Pays All Employees At Least $70,000

Meet The CEO Who Pays All Employees At Least $70,000

Business owner Dan Price has no regrets and claims that to this day, the company is reaping the benefits

As the wealth gap continues to widen across the globe, there's one man who's maintained action against financial inequality in the best way possible - by introducing a $70,000 (£55,000) minimum salary for all of his staff.

It all started in 2015 when business owner Dan Price spoke with his friend Valerie about her money troubles.

Dan Price didn't want his staff to be reliant on money.

Despite earning $40,000 (£31,000) a year, in Seattle where they reside it just wasn't enough for her to cover rent and bills. At 31, Price was at the other end of the scale - his company, Gravity Payments, earned him $1.1 million (£862,500) a year.

Realising that he was part of the problem, Price decided to take action and, after going through the numbers, figured out that each of his 120 staff members should be paid at least $70,000 if they're to live comfortably in the city.

To ensure a fair pay scale across the board, Price sacrificed a significant chunk of his salary, mortgaging his two houses and giving up any stocks and savings.

He maintained his promise, immediately doubling the salaries of a third of those who worked at the company and increasing others to ensure parity across the board.

Gravity Payments

The businessman received some flak for his decision, including some of Gravity's own customers who saw it as a political statement. He was even called a 'communist' by right-wing radio personality, Rush Limbaugh.

However, Price has no regrets and claims that to this day, the company is reaping the benefits.

"There was a little bit of concern amongst pontificators out there that people would squander any gains that they would have," he told the BBC. "And we've really seen the opposite."

Since making the move, more than 10 percent of Gravity's employees have been able to buy their own home in one of the US's most expensive cities for renters, compared with a previous figure of less than one percent.

"Before the $70,000 minimum wage, we were having between zero and two babies born per year amongst the team," he added.

"And since the announcement - and it's been only about four and a half years - we've had more than 40 babies."

Gravity Payments

But the pay rise didn't just affect the workforce's personal lives - it resulted in a level of freedom that benefited the company in the long run.

Although two senior Gravity employees resigned in protest to the move, arguing that it would make junior staff lazy and the company uncompetitive, the opposite has happened.

Rosita Barlow, director of sales at Gravity, revealed that senior staff have had their workload reduced due to the fact that junior colleagues are working harder.

"When money is not at the forefront of your mind when you're doing your job, it allows you to be more passionate about what motivates you," she added.

Recalling the story of one operator who worked in the company call centre, Rosita explained that before the pay rise he was commuting over an hour and a half a day.

"He was worried that during his commute he was going to blow out a tyre and not have enough money to fix that tyre. He was stressing about it every day."

When his salary was raised to $70,000, he moved closer to the office and is now able to spend more money on his health, eating well and exercising every day.

"We saw, every day, the effects of giving somebody freedom," added Price.

"You're not thinking I have to go to work because I have to make money," Rosita agreed. "Now it's become focused on 'How do I do good work?'"

Gravity Payments

Price was hoping that his actions would inspire other businesses to follow the same model and work towards closing the wealth gap in the US, where the top one percent makes in excess of $1m more than everyone else.

However, the opposite turned out to be true. "I've really failed in that regard," he said.

"And it's changed my perspective on things because I really believed that through the actions that I did and that other people could do, that we could turn the tide on runaway income inequality."

Nonetheless, Price's actions and the sacrifices he made along the way have been transformative - both for his employees and his company.

Five years later and the $70,000 minimum salary is still in place and Price says he couldn't be happier.

"It's not like it's easy to just turn down. But my life is so much better."

Featured Image Credit: Gravity

Topics: Money, US News