Just recently it was announced that the budding Seattle-based credit-card payment processing firm, Gravity Payments, owner Dan Price has increased his workers’ minimum yearly wage to $70,000 (it was prior to this increase at about $48,000). This move by Price was a very gutsy move. His ability to increase every worker’s wages like this was planned based on anticipated earnings by the company. If the company does not excel as projected, this raise may be all for naught. But, without being so negative, let’s look at what an incredible impact this action has produced.
While this company is in Seattle, Washington, a change like this would be incredible to happen here on the East Coast. In order to live comfortable in New Jersey the average person should be making around $60-70,000. According to the Bureau of Labor Statistics, average New Jerseyans make approximately $54,000 a year. So, while this number is not horrific, it doesn’t give much wiggle room for families to have a comfortable surplus for vacations, gifts, or even for unexpected payments such as car accidents or natural disaster damages.
Alexa Massari,a junior English and education student, said, “Doing this increases the help for the living style of the average person. People will no longer have to try and spread their paychecks thin to afford their personal lifestyles. Also, not to mention, $48,000 is the starting salary for teachers, so knowing this, we’ll [future teachers] be able to have a better life for the job we do [if this change comes to the east coast].” What Price is doing by making the minimum yearly salary $70,000 is giving his employees some space to live comfortably, preventing them from living paycheck to paycheck as Massari suggested, and it allows them to have an extra stash of money to do things that make them happy.
On the other hand, Tara Egenton, a sophomore English and education student, said, “Workers should not be getting the same amount of money for different types of work. It wouldn’t make sense to give someone in maintenance the same pay as someone with a 4-year software degree. Essentially, this creates a negative image for a company and people will not want to work there. However, all workers should be receiving benefits and all workers should have the opportunity to improve and ultimately, gain a raise. In my opinion, hard work always equals success and it should be rewarded as much as possible.” Egenton brings up a solid point; from his nearly $1mil salary, Price is now only taking $70,000 also. There should be a hierarchy of salaries, but, I think what Price is doing is just making $70,000 the minimum. Hopefully there is still opportunity for occupational mobility.
So, why did Price do this? His new philosophy, based on something he recently read that inspired him, is one that if his workers are happy, the company is happy and healthy. This philosophy is not a new one. We can all look at companies like Google and see that they have tons of outlets to workers to relieve stress and be happy. Now, the difference here is that Google’s salaries are already soaring high. So, instead one might look at Apple. The New York Times did a series of articles on the company and revealed some sad truths about working for one of the world’s most recognizable names in the technology industry. The article reveals the average yearly income of a salesperson at a commercial venue: $25,000. Compared to the billions the company makes in sales, this figure is disgustingly low. Many of these employees work long hours and are not able to take a break. We have all seen what an Apple store looks like and it is no surprise to us that the employees, while guaranteed a break, would not be able to take one. Those stores are always packed with people. It is not fair that the workers are put in positions like this where they avoid taking breaks because of the high demand of customer service.
Companies like Apple should take a lesson from this small company, Gravity Payments. Granting his employees a guarantee of $70,000 per year, Price is allowing his employees to breathe and be economically sound and stable. Just because Apple pays above minimum wage at $12 an hour doesn’t mean that this accumulates to a yearly living wage. There are so many factors in what makes up a yearly living wage such as geographical location, size of family, rent/mortgage rates, etc. For Monmouth County alone, the living wage is approximately $19 an hour. By setting his employee rate at $70,000, Price is also setting the bar for other companies to compete with. Employee satisfaction should be valued by all businesses; Gravity Payments is most likely rated number one in this area because not only is Price raising the salaries of the majority of his workers, in order to do so he will be cutting his own salary to $70,000. Price is truly a dedicated business owner who has the welfare of his employees at top of mind. This, compared to the corruption and greed we see in businesses today, is very uplifting.
The only negative I can foresee in the future if more businesses started taking this same action is inflation of product prices. In most businesses, if employees are paid more like Price’s, it is only fit that the products start costing more. While there are some exceptions to this, like big names such as Apple or Nike who outsource the creation of their products, smaller businesses may not be able to abstain from product-cost inflation. But, nevertheless, this idea of creating a happy and healthy employee by giving him or her extra money that is necessary to live comfortably is a refreshing one to say the least.