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Earlier this year, Seattle-based Gravity Payments CEO Dan Price announced he was setting the minimum wage for his workers at $70k. About 70 of the company's 120 employees would be receiving the raises over a 3 year period and Price cut his salary from $1m to $70k to make the change happen. His reasoning: He read an article that more money for people who make less than $70k leads to increased happiness.
His plan may have backfired:
What few outsiders realised, however, was how much turmoil all the hoopla was causing at the company itself. To begin with, Gravity was simply unprepared for the onslaught of emails, Facebook posts and phone calls. The attention was thrilling, but it was also exhausting and distracting. And with so many eyes focused on the firm, some hoping to witness failure, the pressure has been intense.
More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase - despite repeated assurances to the contrary - also left. While dozens of new clients, inspired by Price's announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has had to hire a dozen additional employees - now at a significantly higher cost - and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.
Two of Price's most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle's close-knit entrepreneurial network were also piqued that Price's action made them look stingy in front of their own employees.
To make matters worse, Price's brother and company co-founder Lucas filed a lawsuit less than 2 weeks after the raise increase announcement, accusing his brother of violating his rights as a minority shareholder.
(Score: 5, Interesting) by Anonymous Coward on Tuesday August 04 2015, @04:33PM
Sounds a lot like this old parable. Too many people are envious because the company chooses to be generous. Some things just never seem to change.
(Score: 1, Insightful) by Anonymous Coward on Tuesday August 04 2015, @06:42PM
Another fable about Human nature. 2k years and it still is true, another 20k and it will still be true. People will continue to have the same reaction, and this fable won't magically alter Humanity. You can call it envy, call it greed, regret, whatever the heck you want. But at the end of the day these facts remain, the reaction of the laborers is a normal human reaction. Just like the reaction of the ones who took the money for one hour's work. Why aren't you asking them why do they feel entitled to full day's wage? Is that not equally asshatish? I'd say it's even more so.
(Score: 2) by dyingtolive on Tuesday August 04 2015, @07:24PM
Well, I guess it depends on whether your world view accounts for the possibility that people sometimes receive things they aren't explicitly entitled to.
I try not to get hung up on those things. I think people worry waaay too much about what everyone else is getting, and that this energy would be better spent elsewhere.
Don't blame me, I voted for moose wang!
(Score: 0) by Anonymous Coward on Tuesday August 04 2015, @10:36PM
In the Muslim version of this parable, as told in the Qu'ran, the full-day workers cut off the heads of the latecomers and then blow up the landowner and his house. Praise be to Allah.
(Score: 1, Informative) by Anonymous Coward on Tuesday August 04 2015, @11:27PM
Actually, there is a Muslim version [sunnah.com] of the parable that appears in the Islamic Hadith, but it's hardly violent: