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- Gravity Payment CEO Dan Price introduced a minimum wage of $ 70,000 in 2015.
- In the years that followed, incomes increased and staff had more babies and bought more homes, he said.
- Amid the pandemic, revenues fell 50%, but Price said the business was able to recover.
- See more stories on the Insider business page.
Six years ago, Dan Price, the founder and CEO of credit card processing company Gravity Payments made waves when he announced he was raising the company’s minimum wage to $ 70,000 for its 120 employees.
To accommodate the change, Price cut his own salary by a million dollars.
In the following years, revenues skyrocketed and staff had many more babies and bought more homes, Price told Insider. To show their appreciation for the change in minimum wage, staff bought him a Tesla.
Dan Price said his employees bought him a Tesla as a thank you.
Dan Price
“It was a really nice gesture and every day I go to work or a meeting with a client, I can just feel the amazing relationship we can have,” he said.
The Seattle-based company’s starting salary was around $ 35,000 per year, Price said. But for the business to thrive, he felt he had to make sure that all employees earned enough to take care of themselves.
This led him to double their salaries. The move inevitably aroused skepticism. “The media in general predicted and said we would fail. Or even in some cases, encouraged us to fail,” Price said.
But he thinks he’s proven them wrong: “It’s been over six years now and we’ve had some really fantastic results. to pay off the debt, ”Price said. About a third of its staff said they had no debt.
“Our employees experienced a 10x boom in terms of the number of babies they had. We went from having between 0 and 2 babies born per year across the whole team, to over 65 born or announced in the last six. past years, “he added. .
The company has more than tripled its payment processing volume for small businesses, according to Price. Income grew every year, until the pandemic struck.
When the COVID crisis really started to bite, things looked less rosy. “2020 was the first year our revenue hasn’t increased in our 17-year history as a company,” said Price. In fact, the company lost 50% of its revenue.
Still, “we were able to recover,” Price said, adding that staff volunteered to take pay cuts to avoid mass layoffs and were reimbursed once the company bounced back.
Price believes that this year the company will be able to record revenue growth again. Unlike other companies, it is not grappling with a more recent crisis: the labor shortage.
Its employee-centric business model, which includes unlimited parental leave and unlimited paid time off, has led to more than 300 applications per vacancy this year. “It gives a little perspective that paying a living wage is a huge factor in keeping and finding employees,” Price said.
This echoes the findings of & pizza CEO Michael Lastoria, who in a previous interview told Insider that he received over 100 applications for every vacancy, which he attributes to paying people a “appropriate salary”. He added, “If you don’t pay your employees enough to cover basic survival costs, what possible incentive could a person have to take on this job?
Referring to the impact of the labor shortage, Price said: “What we have had is a brutal and systematic redistribution of wealth from the vast majority of working Americans to the people at the top. . “
Because of this, “and coupled with the cost of housing, health care and education, which got completely out of hand at the same time, we have created a scenario where it is just not achievable,” said he added.
Price wants to increase the salaries of its employees again in the future. “Things get more expensive every year, so if our minimum wage doesn’t go up, that means it’s really going down,” he said.
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