Company who raised minimum wage to 70k a year six years ago

“A CEO who cut his own salary to give all of his employees a minimum wage of at least $70,000 per year says his company’s revenue has tripled since he made the move.

“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,” Dan Price, the CEO of Seattle-based credit card processing company Gravity Payments, tweeted Tuesday. “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,” he added“

Business wildly successful. CEO happy. Employees happy. United States treasury happy.

Let’s here the downsides of raising the minimum wage to 70,000 a year.

Allan

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All that talk about revenue and not one word about whether or not they were profitable? I wonder why? :thinking:

It in the article. Profits were down in 2020 due to covid.

At least it has beat the Rush Limbaugh prediction.

“I hope this company is a case study in MBA programs on how socialism does not work, because it’s gonna fail,” said the late conservative radio host Rush Limbaugh.“

Hasn’t failed yet. :grinning:

Allan

I don’t wish anything to fail and I also do not wish foolishness to be spread. The reason a business exists is to make a profit and a return on a financial investment. It isn’t about paying people as much as you can. That said, sometimes it’s very good business to pay people very, very well and surround yourself with the very best people. That’s the route I’ve taken in life and it’s successful but there’s a logic to it. It isn’t based on feeeeelings as this example appears to be. Consider all of the free publicity the media has given this company? It would have cost them hundreds of thousands of dollars to get this kind of a national spotlight and yet, after all of this time, the factor they place forward to spotlight is revenue and not profit? Why are we here in businessland? Can you guess? :sunglasses: :tumbler_glass:

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It is an interesting business model. It would be helpful to know what type of business this is.

Some businesses…like financial advising…lend themselves well to this.

This is not going to apply to fine margin retail operations that rely on basic skill labor.

I applaud this CEO success and business model, just don’t see it as applying to a significant sector of small business.

You. can’t be serious. Just because one particular company has the margins for it doesn’t mean all of them do.

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I agree. It would destroy the company I work for. Our margins aren’t necessarily razor thin on most items, but like most retail outfits the parts business is a race to the bottom in terms of pricing to compete.

Especially with the rise of online parts retailers who still undercut us significantly.

I think what helps us survive and will continue to do so is the emergency repair aspect. For most people, the working class folks, a broken down car means they can’t get to work. They could lose their jobs. So they can’t wait for more than a few hours.

I’ve noticed over the past ten years that we are getting less business from the performance builders, who have mostly transitioned to cheaper online prices, but overall we are a much larger company than we were then because people are holding onto older cars due to the high costs of new cars.

Even a fairly basic Nissan Versa quickly turns into a 23,000 dollar ride when you get a mid level trim. And wages haven’t grown in the blue collar world to compensate. So a lot of people are rocking ten to 15 year old cars that need constant maintenance.

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You missed the point.

The CEC tore his decision apart. Said it was socialist and his company would go under.

He claims that his company has never done better.

You statement should be applied to the people who trashed this company, without understanding that this type of company could support a 70k minimum wage.

About $33.66 per hour if anyone’s wondering.

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I’ll bet he doesn’t put up with too much whining from his rich employees. lol

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I find it more likely most of them were saying it wasn’t something all businesses could afford. But sure anyone who predicted his would go under without knowing the financial details of his business were blowing smoke.

Credit processing company? And you think it’s because of that? :rofl:

I always paid my employees at the top end of the scale myself. All these companies with perpetual now hiring signs should obviously up their pay scale if they can.

They are losing more money then they are saving by operating with poorly trained new staff or understaffing because nobody will work for them for long at their current compensation levels.

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All companies do have the ability to lower the exec:employee comp ratio, however.

The argument against this is that you’d lose out on top managerial talent. But there’s little evidence to suggest that high exec pay improves shareholder return.

https://www.google.com/amp/s/chiefexecutive.net/higher-ceo-pay-produce-better-company-performance/amp/

I don’t like using anecdotes, but Costco is an example of lower exec pay (CEO total company is 1/3 of Target’s), higher average wages and outperforming returns. Obviously they can’t pay cashiers $70k, as their 15% margin rule would be shot to hell.

The onus is really on investors to prioritize companies whose values align with their own. A challenge, though, because a zero cost Fidelity or Vanguard S&P fund makes more wealth building sense than any individual stock or managed fund.

You could split the entire CEO salary among the workers in a large corp and it will amount to peanuts per worker.

somewhat smoke and mirrors.

cc proccessing is a sevice built on sales. the sales force is commissioned. the 70k is what he pays his staff of 100-200 employees at hq. the sales force are not “employees” but are 1099’d. lot of turnover, lot of failure, lot of people who give it a go and quit never making a dime.

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It’s not always about the dollar figure. There is potentially a moral boost that could come with that.

Business generally doesn’t give away money for the hell of it.

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Happy employees increase productivity. If employees are happier knowing that their CEO only make 10x what the average employee makes, instead of 100x or 1000x… it might be worth it

Seriously doubt many people give much thought to it. Can’t say I ever gave a ■■■■ what my boss made, far more concerned with what I made.

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