Dan Price, the CEO of Gravity Payment, cut his million-dollar salary to $70,000 six years ago so that everybody at the company could earn at least $70,000 per year, a decision which was met harshly by right-wing outlets as they labelled him a "socialist."
Before Price adjusted his companies pay structure, he was earning thirty times as much as his lowest-paid employee. He made more money the harder his employees worked. To make ends meet, some of their workers were working several jobs; in the meantime, his pockets were getting fatter.
Taking this into consideration Price had to re-evaluate his contribution to the rising income inequality in the United States because the structure he built was imbalanced, reports The Independent.
When Price revealed the new strategy, he could see the relief and excitement on his employees' faces, along with a little skepticism, which was understandable.
Worries regarding rising living costs, making car payments, and accumulating debt started to fade. The sense of security that comes with having a steady income started to take hold. However, some media outlets' reactions painted a different image.
Rush Limbaugh announced publicly that he wished for Price's demise, claiming that it would serve as a case study on how not to run a company.
Others referred to him as a nut or a tree-hugger. Price was advised that his workers would be laid off soon and would have to queue at food banks because his business was going bankrupt. The barrage of threats, slurs, and negativity was never-ending. Price wasn't calling for anyone else to pay his employees; he chose to reduce his own wages in order to improve the lives of his workers.
But it became apparent that when a nation elevates "winner-take-all" capitalism to the highest level, everything else, including some sense of humanity, falls by the wayside.
Price's company has tripled its sales, increased its headcount by 70%, and earned hundreds of applications for each job opening in the six years since he made that decision. They draw top-tier applicants who can concentrate on their work instead of worrying about how to make ends meet on poverty wages.
Since they now have the financial means to sustain a family, the number of babies born to company employees has risen year after year, and is now ten times what it was before the policy was implemented. The number of people buying their first house has increased dramatically, and most workers have been able to pay off some of their debt.
Employees got more rest and didn't have the external burden of missing a rent payment so they didn't have to work a second job, so they could completely concentrate on their job and come to work with a clear mind. A happy workforce equals a happy company.
The sad fact is that putting people ahead of profit isn't always rewarded — but it's always worthwhile. Price soon discovered this. When he put money into his employees, his business grew.
Price grew up listening to Rush Limbaugh, and despite the fact that many of his statements were proven to be false, Limbaugh was right on one point.
Gravity Payments, he said, will be a case study, and it is: it's a Harvard Business School case study. It's a case study of the kind of success a business can achieve with a particular kind of business plan.
Many companies are still hoarding profits, cutting corners, and paying their workers' pitiful salaries. Their profits continue to rise, but employee salaries and benefits remain unchanged. When does enough become too much?
Price and his organization have shown the potential for success when workers are viewed as individuals rather than machines. His company has grown, his workers are content, and his turnover rate has decreased.
Business owners have the opportunity to make their workers' lives easier. It's time to reintroduce humanity into the workplace.