CEO who raised minimum wage to $70k says company is now worth $10 billion
Dan Price, CEO of Gravity Payments, was called a "socialist" and the "lunatic of all lunatics" by Fox News and US conservative media.
It's not often you hear positive stories about billionaires or even millionaires, for that matter, and while the money involved in this story is still astronomical, it's one of the rare ones where a company's employees have a fair share of the pot.
Back in 2015, Dan Price - whose company, Gravity Payments, trades in credit card processing - announced that he would be reducing his own salary from just over a million dollars to $70,000. More importantly, he implemented the $70k mark as the annual minimum wage for all employees across his business.
Despite being mocked by the right-wing press at the time, which labelled the move "pure, unadulterated socialism", doomed to fail, "foolish" and likely to ultimately leave employees "on the welfare line", he announced that his company has now tripled in "processing value". In short, it was worth $3 billion back then - it is now worth over $10 billion...
In the video, which showcases a timeline of events - including video and audio clips of his detractors - you see Price return to the airwaves of CNN, MSNBC, the late Larry King and even Fox News, discussing the success of his approach. You can see the full video here.
6 years ago today I raised my company's min wage to $70k. Fox News called me a socialist whose employees would be on bread lines.
Since then our revenue tripled, we're a Harvard Business School case study & our employees had a 10x boom in homes bought.
Always invest in people. pic.twitter.com/o7Ca7I4b7e
— Dan Price (@DanPriceSeattle) April 13, 2021
As Price expands on in the full Twitter thread, not only did he report that "revenue tripled" and the "customer base doubled", but just as crucially, 76 per cent of his employees feel "engaged at work" (double the national average).
Even within the first year or so of the switch up, his customer retention rate reached as much 95% - way above the industry average of approximately 68% per cent. The thread is significant and comprehensive, so rather than just reciting the statistics ourselves, we'll just let the numbers speak for themselves:
After our $70k min wage:
*76% of employees are engaged at work, 2x the national average
*Customer attrition fell to 25% below nat'l average
*We expanded to a new Boise office & enacted $70k min wage there
*Our highest-paid employee makes 4x our lowest-paid employee, down from 33x
— Dan Price (@DanPriceSeattle) April 13, 2021
Once again, it is worth noting that the conservative media in America attempted to use the label of "socialist" as some form of slander, as opposed to a private businessman valuing his employees and realising that money isn't everything. It might sound like a cliché and perhaps it is to some, but it's all about context.
Price puts things into more relative terms later on in the thread, stating: "I don't miss anything about the millionaire lifestyle. Money buys happiness when you climb out of poverty. But going from well-off to very well-off won't make you happier. Doing what you believe is right will".
Again, you can possibly label this as sentimental, preachy, or easy to say from an already privileged/comfortable position, but the effects it has had on not just his business but staff can't be argued with. Other companies are even following suit: Megan Driscoll, CEO of PharmaLogics ( a biotech recruitment company) took Price's advice and has increased profit and headcount by 50%.
Aside from the direct improvement in the companies own finances, Price also stated that his total number of employees grew by 70 per cent, the number of "babies had by staff grew 10x"; "70 percent of employees paid down debt and the number of homeowners grew by ten times."
Now, in 2021, six years on from when Rush Limbaugh jibed that he hoped the company would be "a case study in MBA programmes on how socialism does not work", he got half his wish: it is being studied at Harvard Business School, but only the merit and success of the model.
Since implementing the $70k salary, he has even managed to open a new office in Boise, Idaho and is still looking to expand. As well as navigating the pandemic, he is looking to increase his staff by a further 10% and continue handing out pay rises where possible.
Just goes to show that if you value the people you work with and reward them for their hard work, the results can be incredible. In the words of Mr. Price himself: "Always invest in people".