Seattle Company Raises All Its Employees' Salaries To At Least $70K
Last week, we reported that while money may not be able to buy you happiness, it sure can get you some more sleep.
Apparently, however, we were a bit off. According to a 2010 research paper published in Proceedings of the National Academy of Sciences by Princeton University professors Daniel Kahneman and Angus Deaton, more money can make people more happy — but only up to a certain point. Anything over $75,000 a year, they found, didn't result in greater happiness.
No one took this study to heart as much as Dan Price, C.E.O. of Gravity Payments, a credit card processing company in Seattle, did. As The New York Times reports, Price decided to raise everyone’s salary to a minimum of $70,000, even the employees lowest on the corporate ladder.
“Is anyone else freaking out right now?” Price said to a room full of his employees after he broke the news to them. “I’m kind of freaking out.”
According to the TimesTimes, Price’s company, which he founded over a decade ago when he was 19, has 120 employees. 70 of them will see their salaries increased, and 30 will actually have their salaries doubled by the new policy.
Where's all that money coming from, you ask? Price will actually take some of it out of his own salary, which will drop from $1 million to $70,000. He will also redirect 75 to 80% of the company’s anticipated $2.2 million in profit this year to the raises.
“The market rate for me as a CEO compared to a regular person is ridiculous, it’s absurd,” Price told the Times. In the US, an executive makes over 350 times the salary of an average worker ($12,259,894 compared to $34,645).
So, even if this is some kind of publicity stunt, it's still productive in that it's drawing attention to two major issues: the enormous wage gap between executives and their employees and low minimum wages across the country.
"I’m completely blown away right now," Hayley Vogt, 24, who earned $45,000 a year at the company, told the paper. "Everyone is talking about this $15 minimum wage in Seattle and it's nice to work someplace where someone is actually doing something about it and not just talking about it."
This year, 23 U.S. states and Washington, D.C. will increase their minimum wage, and Seattle raised its minimum wage to $15 an hour, by far the highest in the country. Politicians seem to be responding, slowly but surely, to the public's plea for higher wages, but it's refreshing to see a CEO care enough to take matters into his own hands.
As Kahneman, co-author of the study that inspired Price's move, put it, income above the threshold doesn’t buy happiness, but a lack of money can deprive you of it.