Credit card processor Gravity Payments is making its minimum wage $70,000 a year, the New York Times reports. Founder Dan Price recently announced the ambitious plan to a room of about 120 staffers.
The raises will take place over the next three years, with about 70 Gravity employees set to see fatter paychecks because of the new policy. Price himself is taking a pay cut from about $1 million to $70,000 to help make it happen. The reason: He read an article that more money for people who make less than $70,000 leads to increased happiness.
The happiness research comes from Angus Deaton and Daniel Kahneman, who won a Nobel Prize for his psychology research in the past. From the Times:
They found that what they called emotional well-being — defined as “the emotional quality of an individual’s everyday experience, the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one’s life pleasant or unpleasant” — rises with income, but only to a point. And that point turns out to be about $75,000 a year.
The news comes as Wal-Mart announced pay hikes for its workers in February. The retail giant said it will raise the pay of 500,000 workers to $9 an hour in 2015 and to $10 an hour next year. There have been calls to make $15 per hour the minimum wage in recent months.
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