A maverick CEO raised the minimum wage at his company to $70K and now he's doing it again
The federal minimum wage in the United States is a paltry $7.25 and it hasn't gone up since 2009.
"It's not acceptable," Holly Sklar, CEO of the advocacy group Business for a Fair Minimum Wage, told CNBC. "The whole point of the minimum wage is to have it go up regularly. It shouldn't sit still every year when the cost of living is going up. The minimum wage is losing value."
Data shows that in 1968, the federal minimum was equivalent to $10.90 in 2015 dollars, nearly $4 higher than today's rate.
Opponents to an increase in the minimum wage often claim that only teenagers make minimum wage; therefore, there's no need for it to be raised.
However, nothing is further from the truth. According to The New York Times, the average minimum wage earner is is 35, and 88% are at least 20 years old. Half are older than 30, and about a third are at least 40.
A low minimum wage keeps people living below the poverty line and increases the need for public assistance.
RELATED: This debate over the minimum-wage is going viral after a blunt commenter set the record straight
According to the Economic Policy Institute, roughly 60% of all workers in the bottom tenth of wage earners (those paid less than $7.42 per hour) receive some form of government-provided assistance, either directly or through a family member.
So basically, the taxpayers are subsidizing employers who refuse to pay workers a living wage.
Seattle CEO Dan Price cut his $1,000,000 salary by 90% four years ago to increase the salaries for all employees to at least $70,000. https://t.co/pAqIfl11pS #fox59
— FOX59 News (@FOX59) September 26, 2019
Back in 2015, Dan Price made headlines for raising the minimum wage at his Seattle-based company, Gravity Payments, to $70,000 a year. It all started after an employee making $35,000 challenged him for paying market rates.
"You brag about how financially disciplined you are, but that just translates into me not making enough money to live a decent life," the employee said.
The move doubled the pay of about 30 of his workers and gave an additional 40 significant raises. After drastically improving his employees pay, productivity and worker retention rates skyrocketed.
"I want the scorecard we have as business leaders to be not about money, but about purpose, impact, and service. I want those to be the things that we judge ourselves on," he said at the time.
Now, Price has done it again.
Three years ago, Price's company acquired ChargeItPro, in Boise, Idaho and it was recently re-branded Gravity Payments. At the ribbon-cutting ceremony, Price announced that the new Boise office would also have a minimum wage of $70,000.
"This morning we cut the ribbon on the new @GravityPymts Boise office AND announced that all of our employees here will start earning our $70k min salary," Price announced on Twitter. "I'm so grateful to work with this amazing team and to be able to compensate them for the value they bring to our community."
This morning we cut the ribbon on the new @GravityPymts Boise office AND announced that all of our employees here will start earning our $70k min salary.
I'm so grateful to work with this amazing team and to be able to compensate them for the value they bring to our community. pic.twitter.com/stwwJgYCqQ
— Dan Price (@DanPriceSeattle) September 23, 2019
While this sort of generosity seems like nothing more than an outlier story, the idea that the bottom line shouldn't be a company's main focus is gaining some steam.
The Business Roundtable, a group of chief executive officers of nearly 200 major U.S. corporations, issued a statement in August with a new definition of the "purpose of a corporation."
Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
It also said:
Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.