Company that promised $70,000 minimum wage reaps rewards

October 27, 2015, 4:35 PM UTC
70000 Minimum Wage
Sales representatives work Wednesday, April 15, 2015, at Gravity Payments, a credit card payment processor based in Seattle. Gravity CEO Dan Price told his employees this week that he was cutting his roughly $1 million salary and using company profits so they would each earn a base salary of $70,000, to be phased in over three years. (AP Photo/Ted S. Warren)
Photograph by Ted S. Warren — AP

A Seattle-based credit-card processing company made headlines in April when the CEO announced that it would raise the minimum salary for all employees to $70,000 over the next three years. Now, several months into the experiment, that company is thriving.

Dan Price, the CEO of Gravity Payments, told Inc. in a recent article that Gravity’s profits have doubled, and revenues are growing at twice their previous rate since he made the announcement in April.

Price, who decided to take a major personal paycut (from $1.3 million to $70,000) and mortgage two houses to invest another $3 million of his own money into the company in addition to raising the minimum salary of his 120-person staff, was inspired to make the move by a previous pay experiment.

In 2012, Price raised company salaries 20% after a conversation with an entry-level employee pushed him to question whether his employees were being sufficiently compensated. In 2013, he did it again. Both years, profits grew, and productivity rose 30% to 40%.

Price told Inc. that the April announcement has energized the company.

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