Dan Price, CEO of credit-card processing firm Gravity Payments in Seattle, made headlines after he raised the salaries of all his employees to $70,000 a year. Now, he is paying the piper.
Price told the New York Times that he is having a difficult time making ends meet after he slashed his own million-dollar salary to $70,000 per year. Price also faces a lawsuit via his brother, who owns 30 percent of the company. But, perhaps the most insightful observation is how it has impacted his company. The Washington Times,
“Now Mr. Price says the decision has cost him a few customers and two of his “most valued” employees, who quit after newer, less skilled employees ended up with bigger salary hikes than those who had been working longer for the company.
“‘He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,’ said Maisey McMaster, 26, Gravity’s financial manager, the Times reported.
“Ms. McMaster, who has now quit the company, said that when she approached Mr. Price with her concerns about the wage changes, he treated her as if she was being selfish.
“‘That really hurt me,’ she said, the Times reported. ‘I was taking about not only me, but everyone.’
“Grant Moran, 29, also quit after the pay changes were enacted.
‘Now the people who were just clocking in and out were making the same as me,’ he told The Times. ‘It shackles high performers to less motivated team members.’”
Ladies and gentlemen, the unintended consequences of absurdly high minimum wages.