Dan Price, CEO of Gravity Payments in Seattle, made headlines a while back by raising the minimum salary of his employees – regardless of job title – to $70,000 a year, to curb the effects of income inequality and keep his employees happy. What happened next was almost the complete opposite.
After the controversial move, Price got a ton of press by liberals hailing him as the “Robin Hood” of CEOs and a shining beacon of hope for how capitalism should run – except it’s not what happens in reality. The fact of the matter is, Price’s top two employees left the company almost immediately because they didn’t feel that it was an environment that rewarded work ethic. It simply wasn’t fair that they had to work to get to where they were and the clock punchers who get there 5 minutes late and leave 5 minutes early get the same salary.
Many clients also stopped doing business with company, for fear of the inevitable raising of fees to counteract the higher cost of labor, but that isn’t enough. Price has to now rent out his home to make ends meet, but still he holds on to the ideology that in order to have people happy, you simply give them lots of fish instead of teaching them how to fish. I just hope that he figures out the error of his ways before he sends all of his employees to an already cramped unemployment line.
Here’s a video explaining all that has gone wrong with this mindset, spoken by Dan Price himself: