Posted on 11/01/2015 7:00:50 AM PST by SeekAndFind
You probably remember the story of Dan Price, the owner of Gravity Payments in Seattle. He’s the guy who decided to give everyone working there a raise to $70K and cut his own pay to the same level in an effort to wipe out income inequality. He became an overnight star on the Left and was making the rounds of all the liberal TV shows. Everybody loved him.
Yeah, that guy. What ever happened to him? (Slate)
Price isn’t backing down about pay going up. Now he’s going all in. He revealed to Inc. that he has sold all his stocks, emptied his retirement accounts, and mortgaged his two properties—including a $1.2 million home with a view of Puget Sound—and poured the $3 million he raised into Gravity. As majority owner, he is not exactly penniless. But if Gravity fails, so does Price. “Most people live paycheck to paycheck,” he says. “So how come I need 10 years of living expenses set aside and you don’t? That doesn’t make any sense. Having to depend on modest pay is not a bad thing. It will help me stay focused.”
And business owners will stay focused on him. The Dan Price Pay Experiment will either be hailed as a stroke of genius showing that entrepreneurs have underpaid their workforces to their companies’ detriment, or as proof positive that Gravity is being run by a well-intentioned fool.
So far – and I’ll confess I was surprised to learn of it – the company is doing okay. They’ve managed a 95% client retention rate after a few customers bailed shortly after the announcement. Revenue and profits are steady, so as a corporate entity it’s looking healthy, at least on paper. But what of Dan Price himself? He’s basically flushed his own net worth into the company and is in debt personally. And there’s a wolf waiting outside the door in the form of his own brother. He’s brought a lawsuit against Dan to try to force him to buy out his share in the company. The legal fees alone, not to mention cashing out big brother’s chips, could be a crippling blow.
In terms of the normal rules of business, Price is probably attracting the very best candidates possible for any job openings he has. (Who wouldn’t want to work there?) And well paid people tend to be productive people so things seem to be going swimmingly on that level. But what about Dan himself? Did he start the company to be a charitable operation or a for profit business? He probably expected to be pretty comfortable at this point in his life after realizing such success in the business world. But now he’s in the red and facing possible disaster. So what’s the lesson we should take from this? If Dan fails personally then the company will follow and nobody will have a job, right? Whether he prevails or fails, this story will be a case study in business school for decades to come.
Just an experiment here with the quotes and the bizarre character substitution:
It is fine that it is his own money or his family’s money this guy is throwing down that conceptual socialistic rathole.
Here is the problem: this guy is using his own money and the future of his company to advance socialistic concepts and the utterly moronic concept of “fairness” in wages. To anyone who thinks that “socialism is only government”, that is fine. But what of it when someone in government like Obama or virtually every person who is a member of his party uses this flawed “experiment in wage fairness” as “proof” that it is possible to run things this way, and references it to get legislation passed. Is it not part and parcel of that process?
If Bernie Sanders points to this farce as proof that his concepts “work” and convinces enough idiot voters to elect him (this is not a stretch by any means) and he then uses Executive Orders to hammer into place things that will work towards establishing this ridiculous model, is what happens at that company not an integral piece of it?
Anyone who buys into this is fooling themselves if they think it can be workable at a level beyond someone who wants to throw his money into it in order to prop it up. This is the equivalent of Bernie Sanders with a printing press for creating currency.
I believe in paying people what they are worth and treating people with respect, but paying two people the same amount of money when one of them neither has to put forth the same effort to earn it, bear the same burden of responsibility, nor expend the same amount of time, energy, and capital to get qualified enough to get to a point of doing a job is not “fairness”. It is extremely disrespectful and unfair towards one of those two people.
In the twisted, socialistic world of “wage fairness”, a person responsible for quality control on pacemakers to be implanted in the chests of sick people would get paid the same pay as a assembly line worker who dropped out of high school to do drugs and live at his parent’s house. If the assembly line worker doesn’t put a bag of desiccant inside the box before it is taped up, does that carry the same assumed risk as the guy who is responsible for quality control?
Laud this guy for throwing away his own money to try to put his money where his mouth is. But anyone who praises the concept of what he is trying to achieve, can fairly have the term “Useful Idiot” applied to them.
Of course his ‘experiment’ is going ok. He hasn’t actually done it yet.
“paying two people the same amount of money when one of them neither has to put forth the same effort to earn it”
What does effort have to do with it?
I read it the first time.
It’s private sector and if the guy wants to pay his employees $70,000 each he certainly is entitled. I suspect employee retention will be excellent for positions that don’t typically pay as well, and poor for those that do. He’s betting the company on an ideological position, though.
I wonder how an employee who does a lot of work the affect the company’s profits feels when a janitor earns as much as he/she does....
This guy is in a commodity business, credit card processing. He needs to wring every penny he can out of his expenses. Employees are expenses. They are assets too and when you pay the good assets the same as you pay the bad assets why would your good employees want to hang around?
Based on history and a study of human nature, this company will fold or be bought out by a competitor that “restructures” roles and salaries based upon their market value.
Not just guilt...
...guilt combined with PC brainwashing.
It might be a bit of a disincentive.
It’s not going to turn out well. Human nature always prevails, but not necessarily immediately.
At some point, those worth 100 thousand dollars or more in this industry are not going to work for the same 70K the janitor makes. And even the hard working janitors are not going to put up with the slacker janitors for the same 70K. Ditto this through every level of employee.
With so few jobs, I’m sure there are folks hanging in there that can’t wait to get out. They will, first chance they get.
It wasn’t that long ago he did this. Time is not on his side, as long as he sticks with it collapse is inevitable.
He thinks he has created something new, there is nothing new under the sun.
We had a profit sharing plan at the business I ran.
As the GM, I would receive half and the employees would have even shares of the other half.
My first year there, as a gesture of helping the employees, I asked the Board of Directors for just an even share with the employees. That way, each employee would receive more of the profit sharing.
Do you know how many employees thanked me for doing this?
None.
Two of them said I was crazy.
RE: Two of them said I was crazy.
So, what happened to the plan eventually?
How many affirmative action slackers are on the payroll making 70,000?
***Amazing what guilt will do to the wealthy these days.***
I remember some guy in the late 1960s or early 1970s inheriting lots of money and decided to give it away. People lined up to get checks that later bounced. I don’t remember what happened to him or his money.
A fool and his money are soon parted....still rings true.
“He became an overnight star on the Left and was making the rounds of all the liberal TV shows. Everybody loved him.”
He was adored by his fellow progressives but not one wealthy liberal followed his example. Did the Kennedy children give up their trust funds? No. Did Mr. & Mrs. John Kerry sell their multiple vacation homes and raise the salaries of their servants to the level they are drawing from investments? No. How about Tom Steyer, Bill Gates and Warren Buffet? No. The Hollywood and media leftists? No. The squaw Elizabeth Warren? No. Al Sharpton and Jessie Jackson didn’t raise the salaries of their cleaning ladies and drivers to the level they are drawing from their shakedown organizations. Matt Lauer, Brian Williams, George Stephanopoulos, Arianna Huffington, Paul Krugman, Rachel Maddow, Chris Matthews and the other leftist pundits continued to live the good life on the backs of the working poor. Even dear leader Barack didn’t transfer his children from Sidwell friends to the DC public schools, sell his Chicago mansion, and donate Michelle’s designer clothes to Goodwill.
Whenever a liberal starts ranting about wealth inequality my first question is, “When are you going to give away your accumulated wealth and move to an apartment on the other side of town?” Usually they go quiet but should they try to argue, I simply say, “When you can demonstrate you practice your ideals, come back and I’ll listen. Until then it is all hot air.”
I worked in a school district for a few years, where the school janitor made more then the school principal (and teachers). The teachers were upset by that fact. It was all they would talk about.
But the janitor worked a ton of overtime like on weekends where a black seal operator has to be on site when the building was open.
He loves the Socialist way until he go broke ,oh wait he is Broke
“”I wonder why the article didn’t mention retention of his top technical employees. (Unless I missed it””
I did NOT go thru this umpteen article of this Dufus-
(REALLY SHOWS HOW MILLENIALS CAN BE BRAIN WASHED!!)
that saying- his BROTHER is suing him!- he Knew immediately this would not work- (notice the guy is LOSING
yes Losing ALL of his money-!)
AND the biggest immediate change?- HIS TOP 2 Employees immediately Quit!- and gave a press release saying the ones right below them are looking to leave also!
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