“What is it to you if I am generous?”- God
A link to a page to follow the Gravity Payments results of the $70,000 a year minimum wage for employees. – Added 8-29-02016
A link to a page to an update on Gravity Payment in 9-26-2019.
Dan Price (Gravity Payments CEO) On Yang Speaks Podcast (On Youtube) Very good discussion! – Added 9-9-02020
The above quote was shared with me via a friend. There is no argument that there is income inequality in the USA. This week there was a huge story from Gravity Payments founder Dan Price that he will both slash his own salary to $70,000 and raise the minimum salary of each employee to $70,000, even the office clerk. This was happening the same week as strikes for $15/hour minimum wage by fast food worker across the country.
Gravity is not the first company to voluntarily pay their employees higher than minimum wage. QuikTrip which pays cashier’s $40,000 a year and Costco which pays its employees $44,000 a year are two other noted examples. They are also much larger than Gravity Payments as they have thousands of employees while Gravity has 120. That is not to diminish it’s accomplishments but just to highlight facts. This is a big deal!
After I read this news I was initially quite excited at the change we are seeing these days. I have been quietly debating with friends and myself the merits of a higher minimum wage. This was exactly what I wanted! People were finally able to have a comfortable living. Shortly after that I began to contemplate further. Even the “lowest paid clerk” will make $70,000, over double their current salary, earning the promised $70,000 within the next three years. How will the, currently, higher paid personnel react? Will their salaries raise also? For example if there was a person earning $80,000 already, compared to someone earning $40,000 currently, the $80,000 earner might be a bit peeved to learn that someone’s salary has raised $30,000 while his has remained stagnant. We are not sure if that’s the case or if higher earners wages were also increased. I will speculate that they were not. I must hope that they will take it in swing. They will recognize that it is his money and they are not losing money simply because their neighbors are now making more. They also have the opportunity to leave a company that has already showed it’s a generous company, to make more money elsewhere if they can.
This reminds me of a passage from the bible.
Friend, I am not being unfair to you. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the man who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’ “So the last will be first, and the first will be last.”” (Matthew 20:1-16, NIV)
The workers who came late and worked only one hour were paid as much as the people who worked the full day. Naturally the people who worked the full day were pissed! But they were reminded that no money was taken from them.
As for the people who received the huge raises, I hope they recognize how lucky they are. I hope that they all recognize the good fortune they have been given and pass some along to others who are less fortunate than themselves.One driver for inflation, in my mind, is the excess of money in the hands of individuals. If 2 people both want a thing that is $50 and there is only one left, this will create an increased price for that part. They may end up paying $100 for something that was only worth $50 initially. To combat this price war on things, we need to focus on being less materialistic. If we become happier with what we have, then the increased salaries will be just fine. The people might spend them responsibly, paying off loans or securing a future via a larger down payment on a home or larger retirement deferrals. They would do good to reference this article about retiring a millionaire. If this creates a culture of people worrying about others happiness and their own future instead of buying more material things, this will have been a great experiment indeed.
I have found through my own journey thus far that I was really only able to realize that I could give some away more after I realized that I had enough. It’s natural for people to seek security. If that means saving up $50,000 or $100,000 before they start donating to charities that’s fine. Another good way to give without giving money is by volunteering time. Your time is just as valuable as money. You could use your time to make money or you could give it away freely. When donating time, don’t feel bad that you aren’t donating money,and don’t let others make you feel bad you aren’t donating money either. This is one issue with our culture is we like to point out the flaws we see in others instead of pointing out the positive. I have done this above a bit, in pointing out that the higher earners could be upset, but I did that just as a thought experiment and to provide discussion that I’m sure others were thinking. When I discussed this topic with friends and they mentioned it I told them what i have written. Let’s be happy that the CEO is doing good!
I did a cost of living using this calculator and found that $70,000 in Seattle is comparable to $56,000 in my current city of Cedar Falls, Iowa. While this is still above the median USA household income, it’s not by much, and it is still $70,000.
How would you react to a situation like this?
I would use it to create a retirement fund – I would be a most grateful employee – especially at my age of 62 where I have lived paycheck to paycheck and do not have a retirement fund and looking for ways to change that picture – it would be like hitting the lottery every month 🙂
the unequal pay between CEO and average employee salary is something my future father-in-law and I have discussed often. He claims in his day, the rule of thumb was 3x the average employee pay – that’s what CEO’s would pay themselves. now? try 10x, or sometimes higher!! What happened?!
the other note – being less materialistic. Good luck in our society, when you struggle, lean on your friends and I’ll do the same. It’s a journey 🙂 enjoy the journey!