CTV/PexelsA tech boss who took a huge pay cut to give all of his 120 staff a minimum salary of $70,000 per year has revealed his unusual business model has payed off.
Dan Price reduced his own salary by $1 million and gave himself the minimum wage of $70,000 after he came to a shocking realisation.
He was hiking with a friend, Valarie, in 2015, when she told him her landlord had decided to up her rent by $200 a month and was struggling to cover her bills.
Dan was frustrated to think that hardworking Valarie, who had served for 11 years in the military, going on two tours in Iraq, and was now working 50 hours a week in two jobs to make ends meet.
At the time she was earning around $40,000 a year, which wasn’t enough to afford a decent home in Seattle, US.
Dan became frustrated that the world had become such an unequal place, and he realised that he – a millionaire – was part of the problem.
The then-31-year-old decided to make a change, starting with his own company, Gravity Payments.
Gravity PaymentsDan told BBC News:
People are starving or being laid off or being taken advantage of, so that somebody can have a penthouse at the top of a tower in New York with gold chairs.
We’re glorifying greed all the time as a society, in our culture. And, you know, the Forbes list is the worst example – ‘Bill Gates has passed Jeff Bezos as the richest man.’ Who cares!?
Five years on, Dan’s gamble has paid off, as Gravity Payments has gone from processing $3.8 billion a year to $10.2 billion.
But it’s not just financial growth Dan is proud of.
Gravity Payments‘Before the $70,000 minimum wage, we were having between zero and two babies born per year amongst the team,’ he said. ‘And since the announcement – and it’s been only about four-and-a-half years – we’ve had more than 40 babies.’
Dan had hoped that other businesses would follow suit, however he was left disappointed that very few did.
He was aiming for widespread, structural change, but has since said:
Boy, was I wrong. I’ve really failed in that regard. And it’s changed my perspective on things because I really believed that through the actions that I did and that other people could do, that we could turn the tide on runaway income inequality.
There’s still time, big businesses. Take note.
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Emma Rosemurgey is an NCTJ trained Journalist who started her career by producing The Royal Rosemurgey newspaper in 2004, which kept her family up to date with the goings on of her sleepy north east village. She graduated from the University of Central Lancashire in Preston and started her career in regional newspapers before joining Tyla (formerly Pretty 52) in 2017, and progressing onto UNILAD in 2019.