In 2015, Dan Price, chief executive of US credit card processing company Gravity Payments, took a US$1 million ($1.3 million) cut to his salary, in order to establish a company-wide minimum wage of US$70,000 ($96,000).
Five years later, the business has grown considerably, and all metrics seem to point to more engaged employees with a better quality of life.
In August, Price took to Twitter, partly to remind us all of what US TV host Rush Limbaugh said at the time: “I hope this company is a case study in MBA programs on how socialism does not work, because it’s gonna fail.”
Actually, Price tweeted, the business has tripled in size, and the scheme is used as a successful case study at the Harvard Business School.
It was clear the decision was a popular one among Price’s 130-strong team. By 2016, his employees had clubbed together to buy him a Tesla to express their gratitude.
But, now Price has revealed some more concrete metrics of success.
Since the minimum wage was introduced, the number of staff members who own homes has increased ten-fold, he said. Contributions to 401k retirement plans have doubled, and 70% of employees have been able to pay off debts.
Staff turnover has been cut in half, and 76% of staff say they’re engaged at work. That’s twice the average for businesses in the US.
Finally, in a surprising but lovely turn, the number of staff members having children has increased tenfold too.
Since my company started a $70k min wage in 2015:
*Our business tripled
*Staff who own homes grew 10x
*401(k) contributions doubled
*70% of employees paid off debt
*Staff having kids soared 10x
*Turnover dropped in half
*76% of staff are engaged at work, 2x the national average
— Dan Price (@DanPriceSeattle) August 23, 2020
“Lots [of] people are saying this proves capitalism and the free market work,” he added.
“I think it’s the opposite.
Get SmartCompany FREE to your inbox every weekday.
“People point to me as a novelty. I stand out for a reason: virtually no one followed suit.
“Relying on benevolent CEOs is a recipe for exploitation of workers”
And, Price is still fighting in the corner of his people.
Just today, he tweeted to say he has taken $0 in CEO wages since the onset of the COVID-19 pandemic, in a bid to ensure he doesn’t have to make layoffs.
“Employees are not cost items meant to be reduced,” he said.
“They are real people with lives who work hard and deserve a living wage and benefits.”
He then laid down a challenge to business leaders making layoffs and still taking home hefty pay packages at this time.
“How do you sleep at night?” he asked.
Employees are not cost items meant to be reduced.
They are real people with lives who work hard and deserve a living wage and benefits.
Since March I’ve taken $0 in CEO pay to help ensure no layoffs.
To CEOs making $10M and laying people off: how do you sleep at night?
— Dan Price (@DanPriceSeattle) September 3, 2020