Earlier this year, Dan Price, the founder of Gravity Payments, decided to raise the minimum wage in his company to $70,000 a year.
It’s not going very well.
Price attempted to pay for the new wages—which he extended to every clerk and sales rep on his 120-person staff—by slashing his own $1 million salary to $70,000, and carving out 75 to 80 percent of his company’s profits.
Now, the New York Times reports, Price is struggling to make ends meet. According to the Telegraph, he has even taken to renting out his own home to drum up spare cash.
Part of the problem? Not all of Price’s clients liked his “socialist” approach to the workplace, and a number stopped doing business with him. They knew the pay hikes would eventually mean a fee increase for them, so they bailed as soon as they could.
Meanwhile, several of his oldest and most valued staff members did not appreciate the fact that brand-new low-level workers were getting huge hikes, while their salaries stagnated. They resigned.
“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” Maisey McMaster, one of the since-resigned employees, told the Times.
She tried to propose an alternative: smaller, gradual pay increases that would allow people to work their way up.
“He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”
“Now the people who were just clocking in and out were making the same as me,” said another former employee. “It shackles high performers to less motivated team members.”
