Dan Price, the CEO of Gravity Payments, announced to his 100-person staff that he will establish a new minimum wage of $70,000 per year. Price is funding the huge across-the-board raises for his employees by cutting his own salary from nearly $1 million to $70K, and he will contribute a greater share of the company's profits. Price established the 70K threshold by acknowledging the research on happiness that indicates money "can buy happiness" up to about $70K/year.
Price's move is a significant extrapolation of the actions by other forward thinking, altruistic CEOs of the past few years such as Costco head Craig Jelinek who establishes a ceiling for his earnings that can't exceed an unreasonable multiple of his lowest paid worker. The actions of men like Jelinek and Price counter the ostentatious and disturbing trend of extravagance where income equality has exploded because of the absurd growth among the wealthiest.
Perhaps this move can alter the discussion of the income gap as simply a problem of achievement gaps in schools. These days, the primary motivator of national standards and new standardized testing is the belief that income equality will decrease if more kids go to college. The reality is our societal gaps are more about wages than about education. And, if businesses paid better for skilled work, we'd probably all be happier.
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