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That notion of paying workers a minimum salary of $70k seemed like a good idea at the time

Discussion in 'Sports and News' started by YankeeFan, Jul 31, 2015.

  1. YankeeFan

    YankeeFan Well-Known Member

    Remember this guy? I would have sworn we had a thread on this, but I couldn't find it.

    Things aren't going so great:

    Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. He wasn’t thinking about the current political clamor over low wages or the growing gap between rich and poor, he said. He was just thinking of the 120 people who worked for him and, let’s be honest, a bit of free publicity. The idea struck him when a friend shared her worries about paying both her rent and student loans on a $40,000 salary. He realized a lot of his own employees earned that or less.

    Yet almost overnight, a decision by one small-business man in the northwestern corner of the country became a swashbuckling blow against income inequality.
    What few outsiders realized, however, was how much turmoil all the hoopla was causing at the company itself. To begin with, Gravity was simply unprepared for the onslaught of emails, Facebook posts and phone calls. The attention was thrilling, but it was also exhausting and distracting. And with so many eyes focused on the firm, some hoping to witness failure, the pressure has been intense.

    More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase — despite repeated assurances to the contrary — also left. While dozens of new clients, inspired by Mr. Price’s announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has already had to hire a dozen additional employees — now at a significantly higher cost — and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.

    Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees.

    Then potentially the worst blow of all: Less than two weeks after the announcement, Mr. Price’s older brother and Gravity co-founder, Lucas Price, citing longstanding differences, filed a lawsuit that potentially threatened the company’s very existence. With legal bills quickly mounting and most of his own paycheck and last year’s $2.2 million in profits plowed into the salary increases, Dan Price said, “We don’t have a margin of error to pay those legal fees.

  2. TheSportsPredictor

    TheSportsPredictor Well-Known Member

    The "some hoping to witness failure" part stands out.
  3. old_tony

    old_tony Well-Known Member

    Predicting and "hoping" aren't the same thing, much as some want to believe it.
  4. YankeeFan

    YankeeFan Well-Known Member

    Yeah, except that none of the reporting in the article backs it up.

    Who's hoping to witness failure? Did the reporter talk to them? What did they say?
    Sea Bass likes this.
  5. DeskMonkey1

    DeskMonkey1 Active Member

    I remember giving kudos to this guy when it happens but a good point is brought up.

    Wouldn't it have been more fair to introduce a percentage, even something huge like 30, 40 percent or more instead of simply saying "Everyone gets $70,000!"

    If I had been, say, a 15-year veteran making $67,000 and a fresh graduate suddenly went from $40,000 to $70,000, I'd be upset.

    Of course, I'm the person who once had an intern making more money per hour than I was as a full-time worker.
    sgreenwell likes this.
  6. TheSportsPredictor

    TheSportsPredictor Well-Known Member

    This response is the equivalent of hitting a person with their own arm and telling them to stop hitting themself.
  7. WriteThinking

    WriteThinking Well-Known Member

    If it's not already in place at this company, that percentage of increase will probably occur next year, and be used thereafter during employees' annual reviews after the flat-rate increase of this year.

    At least, that's what's going on at places using a lower pay scale, if what's going on at Walmart right now is any indication.

    This issue of new hires coming in and making as much, or more than, what employees who have been working there for years is exactly what is being raised in the wake of recent pay-scale changes resulting from minimum-wage raise requirements.

    Because, unless there is some benevolent CEO or other provider like Dan Price cutting into his own exorbitant money to pay for an across-the-board in order for everybody to be paid a certain, higher level, guess who is, essentially, paying for it? The employees already there.

    The people who have already been there a while, who are only just above whatever the new starting pay is, or even those who have been there for many years, will get nothing because it's not required under the law, and, for this year, at least, their hours are being cut.

    Voila, the new, improved starting pay is covered, at no, or certainly much less, expense to the company.
  8. WriteThinking

    WriteThinking Well-Known Member

    Think of that on a world-wide scale and in terms of money for a major company like Walmart or McDonalds and you get a real sense of the impact of the money, hours and manpower involved with this pay change, or any so-substantial increase as one up to $15 an hour.

    In theory, it'd be nice if everybody made at least $15 an hour, no matter how lowly their job. But that increase has to be paid for. This is exactly how/why doing more with less begins.
  9. Guy_Incognito

    Guy_Incognito Well-Known Member

    Each time you do that you widen the gap between the haves and the have-nots. You're making it worse.
  10. DeskMonkey1

    DeskMonkey1 Active Member

    Are you trolling?
  11. Guy_Incognito

    Guy_Incognito Well-Known Member

    What do you mean? Am I sincere? Of course not. Just pointing out the flaw of the "wage gap" talking point.
  12. bigpern23

    bigpern23 Well-Known Member

    Frankly, the veteran employees upset over younger employees making that much money are stingy assholes.
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