[CA Conservative]

That is very generous of him, and it is his money to do with as he wishes. But what happens when if/when the company goes under, and that receptionist making $70k has to go back to making $20k? Because you know all of these people will buy houses and cars based on what they are making, not based on what their job is actually worth on the open market...

[LostInBayport]

what happens when if/when the company goes under, and that receptionist making $70k has to go back to making $20k?

They may just find out: over the next three years, every single employee — even the lowest paid clerk — will be paid a minimum annual salary of $70,000

It would be interesting to see where these people are in four years time if at that time the owner decides he can't sustain this; who has savings and investments, who has a mountain of bills.

As another FReeper posted above, a savvy competitor can undercut him by paying staff half as much and offering lower prices.

[Quality_Not_Quantity]

But what happens when if/when the company goes under, and that receptionist making $70k has to go back to making $20k?

We call them 'Golden Handcuffs.'

Promote a person without marketable skills into a high-paying position, and you end up with a compliant employee who has no choice but to do your bidding. I've seen it first-hand, and it ain't pretty.