225.4 - Update: Gravity Systems, the company that raised its minimum wage to $70,000, is doing just fine

Update: Gravity Systems, the company that raised its minimum wage to $70,000, is doing just fine

Another update which isn't really an update because I don't think I've mentioned this before - but it's worth bringing up now for the sake of looking at the then and the now.

Back in April, Dan Price, the founder and owner of a credit card processing company called Gravity Systems, shocked his employees by announcing that over the course of the next three years he was going to raise the minimum pay at his company to $70,000 a year - a minimum $22,000 above the current average at the company.

He would pay for this, he said, by cutting his own salary from about $1 million to $70,000 and using 75-80% of anticipated profits.

The right wing of course hated the idea, branded it by the dreaded name "socialism," said it would never work and would wind up serving as a case study in how socialism is doomed to eternal failure.

So as you might have guessed, the update is on how the company is doing.

Pretty good, in fact.

Dan Price

Revenue is growing at twice the rate it was before the announcement. Profits have doubled. Some customers left because they disagreed with Price's action, but despite that, overall, customer retention is up. Also up is the quality of applicants who want to work there. About the only thing that's down is employee turnover.

Admittedly, it has only been six months, and there will be those who will say that that is not a long enough time to make any judgment. Which is a fair enough point, even though many who would say that would have been the first to say, if the company had failed or Price had gone back on his word, that this single example was absolute proof that the entire idea of reducing income inequality in the workplace can never ever work.

But even if six months is not enough time for a long-term judgment about the future of a particular company, it is still more than enough time to prove that Price's decision is not an inherently losing proposition and perhaps more importantly that while the pursuit of profit remains the root cause of our economic and many of our social miseries, running a profit-making business does not have to turn you into an amoral, soul-dead greed hog - or a smirking little prig. It's just that is usually does.

Sources cited in links:
http://www.dailykos.com/story/2015/04/14/1377642/-Washington-employer-shocks-employees-by-raising-his-company-s-minimum-wage-to-70-000-per-year
http://www.dailykos.com/story/2015/10/26/1439456/-Update-on-the-CEO-who-made-70-000-minimum-wage-for-all-his-employees