How the company with a $70,000 minimum wage is doing half a year later

Six months ago the CEO of Seattle-based tech company Gravity made headlines around the world after he announced that he was raising the minimum wage for all his employees to $70,000 a year (£46,000).

Dan Price cut his own salary to fund the decision, saying he was committed to fighting wage inequality and executive pay had got "out of whack".

It'll never work the critics said, and they were almost right.

Within a few months, several customers left the company over the "political statement", two of its most valuable employees quit saying the move unfairly rewarded less loyal and hardworking staff, and Price's own brother sued him to demand Dan buy his stake in the company.

But half a year later, it looks like Price's selflessness is starting to pay off.

Inc magazine reports that revenue growth at Gravity is twice as strong and profits have doubled since the salary hike decision was announced.

New business requests have skyrocketed from 30 a month to 2,000, and customer retention went up from 91 per cent to 95 per cent in the second quarter of 2015.

Speaking to Mic about the changes, Price said:

If [an employee's] car breaks down, or a tire goes flat, it is not a constant state of emergency anymore. Their economic breathing room has unleashed even more productivity and performance for independent businesses. Their job can be an extension of their values, rather than a place they go to make ends meet.

It might go against everything they teach in business school, but for Gravity at least, capitalism with a smiley face is working.

Keep reading...Show less
Please log in or register to upvote this article
The Conversation (0)