Ahhh... but you have to give him credit for good intentions.
Posted on 08/02/2015 7:12:09 PM PDT by SeekAndFind
Do you remember that millennial CEO from Seattle who raised the salaries of all of his employees to at least $70K to combat income inequality? That was a really inspirational story for many in the SJW movement and made Dan Price a sort of sainted figure among liberals as he paved the way toward a more fair and equal future. Unfortunately, as many conservative, free market analysts predicted at the time, such generosity can come at a cost. And now the young entrepreneur seems to be hitting the reality wall. (Fox News)
The Seattle CEO who reaped a publicity bonanza when he boosted the salaries of his employees to a minimum of $70,000 a year says he has fallen on hard times.
Dan Price, 31, tells the New York Times that things have gotten so bad he’s been forced to rent out his house.
Only three months ago Price was generating headlines—and accusations of being a socialist — when he announced the new salary minimum for all 120 employees at his Gravity Payments credit card processing firm. Price said he was doing it, and slashing his $1 million pay package to pay for it, to address the wealth gap.
“I’m working as hard as I ever worked to make it work,” he told the Times in a video that shows him sitting on a plastic bucket in the garage of his house. “I’m renting out my house right now to try and make ends meet myself.”
The fact that Mr. Price himself is cutting corners in his personal life really has nothing to do with this story. It was his own choice to slash his salary and he is the only one responsible for his home budget. So be it. But he describes a number of other woes which were not only predictable, but probably unavoidable. First of all, some of his higher performing workers have quit. Why? Because people who were “just clocking in and out” with the “least skills” (as one former employee put it) got huge raises while the top talent got little or nothing. This is similar to a theme we’ve discussed here before, such as the backlash we can expect from people who have skilled labor jobs paying 15 or 16 dollars an hour when they suddenly see the guy running the fry machine getting the same thing.
Long time customers also bailed out on Gravity either because of disagreements with his politicized business policies or fears that he was raising his rates to cover his generous employee compensation package. The other person who is up in arms is the CEO’s own brother who is currently taking him to court. The sibling is a 30% partner in the firm and is watching the value of his investment (and his own income) melting away before his eyes. What is an investor supposed to do when the CEO suddenly appears to lose their mind and begins giving away all the company profits and crashing their revenue forecasts?
I’m sure Mr. Price is a very nice man and he clearly cares about people in general. But his move to push his generous nature into his business model is returning precisely the sort of results which the free market predicts.
Seattle? ahahahahaha!
Great
This firm will be in bankruptcy within a year
It is getting to where $70,000.00 is not all that much.
I have been out of the work force for quite a few years thus was more than a little surprised when my Daughter complained of her $50,000.00 Salary and her husband makes a little more.
She is a school teacher at a private school and he is an RN.
The stupid is strong in this one.
The lesson to be learned here is never, ever disregard human nature in pursuing an agenda.
Liberals do it all the time.
Education is expensive and this libtard is buying the best his company can afford.
Here’s a solution ( which I doubt he will take ) — BRING THE COMPANY’s SALARY STRUCTURE TO WHAT IT WAS WHEN THE COMPANY WAS STILL PROFITABLE.
Hopefully a good capitalist will buy it and turn it back into a good company
Similar thing happened to me 20 years ago. Some Ivy League kid took over daddy’s business and wanted to “shake things up”. Within weeks, entry level/lower level employees received major pay increases and perks as though they were jr. managers or skilled techs. This was done to “make things fair for the ‘little people’. “
The Jr. managers, mid level workers, and techs got pissed. These folks had college degrees (Bachelor and Masters often with specialized certificates) or at least 15+ years in the company. Many told me “why did I even take all this schooling or make the effort if ‘Joe putz’ file clerk has the same level compensation/perks as me?” They started trickling out of the company within a few months with noticeable position gaps at the end of the year.
At the same time, the low level employes started to get an attitude. To them, they just won the lottery and didn’t see the need to improve their skills or seek higher positions. They stagnated, became tardy, and took a lot of vacation/sick time (often in the middle of the day, with no advance notice, when the work load was at it’s highest). When higher positions opened up they simply weren’t interested. The low level employees who still had a work ethic got angry when the slackers dumped their work on them. Many of these employees left.
The turning point occurred when a respected jr. manager, POed at the current state of affairs, concluded that it was time to leave (he had a new job lined up) but not before making a statement. When an entry level file-clerk position opened up, he put in for a transfer.....and boy, did THAT create a stir in the office!!! When asked by upper management why he was doing this, he calmly stated, “Why go through the stress and long hours as a jr. advertising manager when I can get a simpler, less stressful job at relatively comparable pay and benefits. When leadership declined the transfer, he put in his two weeks.
I left two months after that incident and never looked back. Heard a few years later that the punk kid got deposed by the board (think “Mutiny of the Bounty”) and was sent home packing. Must of been a real pain when the board and new CEO tried to rectify things.
A fool and his money are easily parted and results in people losing their jobs to boot.
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