- Gravity Payment CEO Dan Price set a minimum wage of $ 70,000 in 2015.
- In the following years, incomes increased, employees had more children, bought more houses.
- Revenues fell by 50% in the wake of the epidemic, but Price said the company was able to recover.
- See more stories on the Insider business page.
Six years ago, Dan Price:, The founder and CEO of Gravity Payments credit card company, made a big wave when it announced that it was raising the minimum wage of the company to $ 70,000 for its 120 employees.
Price adjusted his own $ 1 million salary to accommodate the change.
“In the years that followed, incomes increased, employees had more children, they bought more homes,” Price told Insider. To show their appreciation for the change in the minimum wage, employees bought him a Tesla.
“It was a really nice gesture. Every day when I go to work or meet clients, I just feel the amazing relationship we are able to have,” he said.
The Seattle-based company previously had an initial salary of about $ 35,000, Price said. But for the company to thrive, he felt he needed to make sure all employees cared enough to take care of themselves.
This forced him to double their salaries. The move inevitably sparked skepticism. “The LMs generally predicted that we would fail. Or even in some cases, rooted in our failure, ”Price said.
But he thinks he has proved that they are wrong. “Pay off the debt,” Price said. About a third of his staff said they had no debts.
“Our employees have increased 10 times in terms of the number of children they have given birth to. “We have grown from 0-2 children born annually in the whole team to more than 65 born or declared in the last six years,” he added. ,
Price notes that the company has more than tripled the volume of payments for small businesses. Revenues were rising every year until the epidemic hit.
When the COVID crisis really started to bite, things looked less rosy. “2020 was the first year that our revenue was not growing as a company in our 17-year history,” Price said. In fact, the company lost 50% of its revenue.
However, “we were able to recover from it,” Price said, adding that staff had voluntarily made pay cuts to prevent mass layoffs, and had been reimbursed after the company returned.
Price believes that this year the company will again be able to report on revenue growth. Unlike other companies, it is not struggling with the recent crisis of labor shortages.
Its employee-based business model, which includes unlimited parental leave and unlimited paid leave, has brought in more than 300 job vacancies this year. “It gives a little perspective that paying a living wage is a huge factor in retaining employees,” Price said.
This echoes the findings of Michael Lastoria, CEO of & pizza, who in an earlier interview with Insider received more than 100 applications for each vacancy, which he attributed to people being “properly paid”. He added.
Referring to the consequences of labor shortages, Price said:
That is why “along with the costs of housing, health care and education, which at the same time are completely out of control, we have created a scenario where it simply does not work,” he added.
Price wants to raise the salaries of its employees again in the future. “Everything is getting more expensive every year, so if our minimum wage does not increase, it means that it is really decreasing,” he said.
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