Linked by Thom Holwerda on Sat 1st Aug 2015 11:12 UTC
In the News

Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. He wasn't thinking about the current political clamor over low wages or the growing gap between rich and poor, he said. He was just thinking of the 120 people who worked for him and, let's be honest, a bit of free publicity. The idea struck him when a friend shared her worries about paying both her rent and student loans on a $40,000 salary. He realized a lot of his own employees earned that or less.

Yet almost overnight, a decision by one small-business man in the northwestern corner of the country became a swashbuckling blow against income inequality.

Whether you support his actions or not, ask yourself this question: what does it say about our society that a young man slashing his own salary to increase that of his employees draws more ire than a CEO raising his own salary to 70 times that of an average employee?

Most mystifying of all, though, are the employees leaving because their coworkers got a pay raise to $70000, while they themselves already earned $70000. I don't understand this mindset. You still have your salary. You still get your $70000, except now your fellow men and women on the work floor also get it. Is your self-worth really derived from earning more than the people around you? Is your sense of self really dictated by how much more you earn than Jim from accounting or Alice from engineering?

Maybe I'm just too Dutch and too little American to understand this mindset, but I firmly believe this world would be a massively better place if more CEOs cut their own salaries to raise that of their employees.

Permalink for comment 615165
To read all comments associated with this story, please click here.
RE[3]: Comment by tidux
by IgnitusBoyone on Sat 1st Aug 2015 19:34 UTC in reply to "RE[2]: Comment by tidux"
Member since:

Salary equivalence does not equal liquidity equivalence. A Master's student likely has a higher wage then a High School student but also more debt burden from the education cost.

It is a big thumb in the eye to employees to increase the liquidity of employees who are making it (but struggling) at one pay level but not at others who may be making it (but also struggling ) at a higher pay level.

A fairer use of the money would be raise the minimum salary to a lower level say 35-40k a year. Then use the difference to lower to cost of health care at the business and increase matching to the retirement accounts. This increases the liquidity of all employees so everyone sees a benefit while also making sure everyone makes above the poverty line.

Additionally, he could have a retroactive education compensation program. The company could offer up to X amount in education reimbursement weather you go under that education while working for them or before. A promissory note could be used to ensure that the employee must work for the company for X years or repay the money.

Reply Parent Score: 1