
Gravity Payments' Revenue and Profits Doubled After $70,000 Minimum Wage Set - schwaps
http://www.slate.com/blogs/moneybox/2015/10/23/remember_dan_price_of_gravity_payments_who_gave_his_employees_a_70_000_minimum.html
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yaps8
This quote strikes me most: "Here I am walking around making $1 million a
year, and I'm working shoulder to shoulder with people in her situation who
are every bit as good and valuable as I am."

I wish more people would realize that those earning less than themselves are
not necessarily less deserving but merely less valuable in a marketed job
force.

~~~
yitchelle
I had a similar conversation with my wife the other day. Before the kids, she
was an elderly care attendant, providing care for the elderly folks who are in
their sunset years of their lives, and I worked in tech. Although my salary is
not high, it is still about 5x of hers. I feel rather embarrass during my
discussion as I feel that she is contributing a lot more to people lives than
I am, the essential services. The stuff that I make would not make much
difference in everyday life if it did not exists.

She is much more valuable to society than I am.

edit: grammar

~~~
lujim
I wouldn't feel too guilty about "value". In a world of finite resources with
alternative uses, your value (how much you are paid) is often your share of
how much revenue you help generate. Value (pay) and value (worth) are not the
same thing. Why does a pro athlete make 10 mil and a 3rd grade teacher make
30k? Because more tangible revenue is generated by a single pro athlete than a
single 3rd grade teacher in a given year. It sucks, but hating it or feeling
guilty about it doesn't change it.

~~~
existencebox
That may have a component to unequal pay, but I think trying to paint it as
the whole picture (or even the major part) isn't quite fair.

I'd argue the huge pay differentials are often because humans are TERRIBLE at
judging long term... anything. A pro athlete can fill a stadium at some $$ per
seat, yes. If a pro athlete stops playing, what happens? the stadium stops
filling as much, we potentially lose some ancillary jobs from decreased
viewing population (but given the number of sports stars and the nature of
teams, losing one outside of a very few likely won't cause much), but in the
long term, what is the cost?

Now let's remove an equal number of teachers as could be paid with that single
salary. Even if this is a low end athlete, given teacher pay, you're losing
dozen/few dozen teachers. What is the long term cost to students who can no
longer be educated, or get a much poorer education (or simply now have far
bigger classes)?

I realize there are many holes in this argument as it asserts a lot about how
money is distrbuted/what externalities exist, but I see it as one facet.

There are also the more well explored aspects of "we like to lionize
celebrity/success" and "teachers don't have much political or social clout
given their resources/our prioritization in society" (although this links back
to my prior statements about long term value and society preferences.)

In summary, I think there's plenty of reason to hate/feel guilt about it, and
work to change it. Yes, the feelings alone do nothing, but if no one is
getting angry then certainly nothing will ever change.

~~~
lujim
I 100% agree. People are terrible at judging long term non tangible value.
That's mainly because it's hard to quantify on a balance sheet. That's why I
put the 1 pro athlete vs 1 teacher for 1 year stipulation on it.

------
massysett
Not a very interesting article:

1) it's only been six months

2) doesn't say whether a $70,000 minimum is particularly high for the jobs
that are at his company

~~~
rubidium
It's an interesting article:

1) It's been six months. I've recently wondered how it's going.

2) The article did say starting wage was $35K at his business.

------
cryoshon
"While financiers and C-suite honchos have showered themselves in
compensation, most Americans haven't had a raise, in real dollars, since 2000"

One company can't fix this problem alone, though Gravity's effort is laudable.

------
iaskwhy
"More than half the cost will be offset by Price's pay cut."

------
grhmc
TL;DR: He and his company are both doing great.

~~~
PhrosTT
Six months after Price's announcement, Gravity has defied doubters. Revenue is
growing at double the previous rate. Profits have also doubled. Gravity did
lose a few customers: Some objected to what seemed like a political statement
that put pressure on them to raise their own wages; others feared price hikes
or service cutbacks. But media reports suggesting that panicked customers were
fleeing have proved false. In fact, Gravity's customer retention rate rose
from 91 to 95 percent in the second quarter. Only two employees quit—a
nonevent. Jason Haley isn't one of them. He is still an employee, and a better
paid one.

------
neilellis
I think the right-wing backlash against him shows that they're not really so
bothered by state intervention as they are ideologically opposed to a fairly
paid society.

Everyone getting paid the same is communism, and yes massively de-motivating
that if you work harder you get paid the same. Massive pay disparity is the
end result of unchecked capitalism, look at any country with low taxation,
same result always. Socialism just works to get a happy compromise where you
have the chance of making more through your efforts, but less people get a
huge head start and fewer fall through into poverty. I'm not sure what there
really is to fear here.

The difference between America's mean and median wage is quite shocking (and
the worst amongst developed countries I believe). Clearly we see that this is
what the right want to hold onto at all costs.

This guy should be lauded and applauded for having the balls to do such an
amazing social experiment which benefits all his employees.

~~~
ams6110
I'm pretty conservative, but I don't object to him doing this in any way. I
also highly doubt it will be sustainable. Unless all along he really _was_
paying below market for the work his employees are doing.

I also have no disagreement with the notion that higher paid employees will be
more productive (though I've certainly seen individual examples where the
opposite is true) but that doesn't mean it's affordable for the business owner
in all situations. If I were paid $70,000/yr to bag groceries I'd be
productive as hell but I'd also bankrupt my employer.

If it does end up working for him and he's more profitable and has happier
employees and customers, wonderful. I don't understand why any free-market
person would object to that, as long as it's his business decision and he's
not being _forced_ to pay what he pays. Clearly a $70,000 minimum wage would
_not_ work for any and all employment situations.

~~~
crimsonalucard
It's not about 70K minimum wage. It's about a more fair distribution of
wealth. Why funnel profits towards shareholders or owners who usually do no
work when all that extra wealth can be redeployed back to the people who
actually run the business: employees.

Ironically what is unsustainable is not redistributing wealth towards labor.
What is unsustainable is concentrating wealth towards a few people who
contribute no work.

~~~
sokoloff
If being an owner is so low-effort and low-risk, why not just found a company
instead of working for someone else?

It's because it's hard and risky work to start a company. Your observation of
the company owner not doing any work is a temporal discrepancy not a
difference in overall risk and effort (IMO).

~~~
Avshalom
There's owners and then there's owners. With a publicly traded company 'owner'
is any one with enough cash lying around to buy a share.

Then there's also owners who did a lot of hard risky work several decades ago,
now insulated from that by layers of management, but don't contribute any more
value to the company right-now than any project manager or warehouse
supervisor.

Or ownership via nepotism which is a bit of a crap shoot. Sometimes sons and
daughters work their ass off; some times they're just barely competent enough
to not cause a revolt when given the keys.

~~~
sokoloff
IMO, even the owner of a share of common stock is merely a one-for-one
replacement of the person(s) who originally put up the capital and took the
risk originally, so they get the same standing in my book.

If person A takes the risk, founds and grows the company and then sells their
stake to person B, person B has purchased the claim that person A once held.
If person A was entitled to the rewards for prior work without current effort,
they can reasonably sell that claim to person B, whereupon B is entitled to
those rewards (at the risk of the capital B put up).

In fact, being able to do so is critical to the current funding structure for
many ventures (because it provides liquidity for person A, increasing the EV
for A to originally start, because they can get liquidity later rather than
having to hold the share for eternity to receive the value they created).

(I realize that not everyone will share this point of view, which is OK.)

~~~
crimsonalucard
risk taken 4 years ago is not worth the same as risk taken today. If they want
to make it fair, share value should slowly bleed and be distributed to labor
over time.

If a laborer can accrue shareholder value over time. Non laborers should lose
it with time.

------
ascorbic
Remember the four other submissions of this in the past three days? Why aren't
these dupes being detected?

[https://news.ycombinator.com/item?id=10445012](https://news.ycombinator.com/item?id=10445012)
[https://news.ycombinator.com/item?id=10442726](https://news.ycombinator.com/item?id=10442726)
[https://news.ycombinator.com/item?id=10441107](https://news.ycombinator.com/item?id=10441107)
[https://news.ycombinator.com/item?id=10446171](https://news.ycombinator.com/item?id=10446171)

~~~
neilellis
Yeah I've submitted a few articles only for them to fall off the 'new'
section, then later that day almost identical URLs have reached the front
page. With all these smart people about surely someone can write a de-dup
detector for articles (and I don't mean URL comparison).

~~~
falcolas
Dang said this is intentional, to allow stories which didn't receive much
attention the first time another chance to be viewed. I, for one, appreciate
this, since I did not see this article the first time around.

~~~
snowwrestler
A lot of people don't like dupes because they feel that karma for posting a
story should go to the first person to post it. To them, it seems unfair to
post a story and get no karma points, and then someone else posts (reposts?)
it a day later and gets hundreds of karma points.

Personally, my opinion is that since karma points are made up and worthless,
it doesn't matter. Allowing dupes makes it more likely that cool stories will
hit the front page, at the cost of annoying a few people. Seems like a good
tradeoff to me.

~~~
eevilspock
People should be happy that an article they deem good made it, not that they
got the karma for it because they were first. Being first is luck, not merit.
Most importantly, the thing we want to "win" around here are good articles and
discussions, not individuals. (Which is ironic, given it is a rather socialist
attitude in a capitalist-dominated community culture.)

In any case, in the long run it all averages out. The likelihood that this
works for you is just as high as it is against you.

