
The boss who put everyone on 70K - orjan
https://www.bbc.com/news/stories-51332811
======
dang
Threads from 2015:

[https://news.ycombinator.com/item?id=9371854](https://news.ycombinator.com/item?id=9371854)

[https://news.ycombinator.com/item?id=10450541](https://news.ycombinator.com/item?id=10450541)

[https://news.ycombinator.com/item?id=10448113](https://news.ycombinator.com/item?id=10448113)

[https://news.ycombinator.com/item?id=10657913](https://news.ycombinator.com/item?id=10657913)

Related from 2016:
[https://news.ycombinator.com/item?id=12071667](https://news.ycombinator.com/item?id=12071667)

------
bloblaw
I used to work at Gravity. Dan (owner of Gravity) is sincere and frankly the
real deal.

Dan Price really is like what is presented in this article. He _actually_
cares about his employees and is being genuine here. He's a good person,
making a private business decision to increase the pay of frankly his lowest
paid workers.

In a city where the average tech worker earns $275k a year, he believes its
the right thing to do to make sure everyone that works for him at Gravity can
earn enough to afford rent, food, and some fun.

Say what you will about the merits of decision, but it takes real leadership
to make it and stand by it. I happen to think he's doing the right thing and I
hope other companies choose to follow suit.

~~~
dominotw
>average tech worker earns $275k a year

I need to move to bay area this year. thats my sole mission this year.

~~~
alexbanks
I'm curious where this poster got that figure. I haven't found anything like
it, in fact a pretty consistent 145k average salary. I would also be wary of
average vs. median, as there's some real crazy outliers out there.

~~~
irrational
I have a sister-in-law that I recently learned is making $275k in a tech job
in Seattle. She has no college degree or formal training. She has just learned
things on the job over the years. I was frankly astonished. That is more than
double what I make as a senior software engineer 3 hours away in Portland.

~~~
brailsafe
As a software dev just to the north in Vancouver, BC at 110k CAD: that's
bananas money.

~~~
emp
When last did you change jobs? A year ago I did and set a hard minimum at 120,
and managed 2 offers as high as 160 and took a lower one due to more
interesting work and great environment. And had to cancel 3 more on site
interviews that knew my range was 130-140. My previous job had a 2% raise over
3 years, with a salary out of touch with the current ranges. It seems the only
way to get a raise much of the time is new work (and practice negotiating!)

~~~
brailsafe
Just a few months ago. What's your specific discipline and exp? It's good to
hear that there's a lot of room to grow. I'm well aware of when/how the
biggest gains are made, but I appreciate the insight nonetheless. I consider
110k at the moment to be pretty ok, just considering my extremely spotty track
record atm. I'll stick around for now to rebuild my savings and get some
current exp, but won't sit on it for too long especially if the compensation
doesn't seem right.

------
cyberferret
Just to clarify - the article mentions that he put everyone in the company on
a _minimum_ salary of $70K. I would think that high level technical staff on
$100K+ would have been more than a little upset to have their salary slashed.
Junior staff members are the winners here!

~~~
nbp160130
I can't find any mention of technical staff having their salary slashed. The
only mention of pay cuts is the one the CEO took. Would you mind sharing a
source where this is stated?

~~~
chrisseaton
> Would you mind sharing a source where this is stated?

It’s in the title. ‘Everyone on 70k’ is a pay cut if you were in more than
70k, as any professional would be. It’s clearly wrong as it doesn’t make any
sense, but that’s the source they were referring to.

~~~
alkonaut
> as any professional would be

Would call center staff, receptionists etc not be professionals (I.e. is there
a use of the term I'm not aware of?). Is it people doing work requiring
degrees?

~~~
chrisseaton
> Would call center staff, receptionists etc not be professionals

Are you just asking what a 'professional' is? As in you're not a native
speaker?

The etymology is from 'someone who has professed vows' and traditionally means
someone who's part of some kind of learned society. In the past it was classes
like doctors, lawyers, religious ministers. Over the industrial revolution it
began to include engineers. Engineers used to be part of learned societies (I
am, as a software engineer), but now it's more relaxed in many places, with
software engineering being at the extreme end of relaxed.

So not call centre staff, because that's not part of any learned society and
are not part of a career that would traditionally have been so but has become
more relaxed.

Wikipedia explains well
[https://en.wikipedia.org/wiki/Professional](https://en.wikipedia.org/wiki/Professional).

Are you confusing the term with just 'anyone who works for a living'? That's
not what 'professional' means.

~~~
alkonaut
> Are you just asking what a 'professional' is? As in you're not a native
> speaker?

Indeed.

> Are you confusing the term with just 'anyone who works for a living'? That's
> not what 'professional' means.

That's how it's commonly used in sports, perhaps that's where I got it from.
I'd call any athlete who performs their sport for a living "professional", not
because they are e.g. part of a specific league, but exactly because they can
do it for a living.

But regardless: which people in a typical company would be the professionals?
People with protected titles (Lawyers, etc)? How do e.g. Engineers fit in?

~~~
chrisseaton
I think the amateur/professional use is a bit different, because nobody is an
amateur call centre worker.

> But regardless: which people in a typical company would be the
> professionals? People with protected titles (Lawyers, etc)? How do e.g.
> Engineers fit in?

People who's careers would traditionally have been part of learned societies
that you had to profess vows to get into, and then careers that have grown up
around that.

Lawyers, engineers, HR, marketing (there are learned societies for HR and
marketing), etc.

~~~
reificator
> _I think the amateur /professional use is a bit different, because nobody is
> an amateur call centre worker._

There are political volunteer call center workers aiding the campaign of their
favored candidate.

~~~
chrisseaton
I really don’t think that’s what the amateur/professional distinction means.
You’re taking it a bit literally.

------
angarg12
> "When money is not at the forefront of your mind when you're doing your job,
> it allows you to be more passionate about what motivates you," she says.

I spent the first several years of my career working in academia for a poverty
level wage.

I can confirm from my own experience that when you worry about not being able
to pay rent and all the bills, it's very difficult to be productive, much less
in a job that requires any kind of focus or creative thinking.

~~~
pritovido
That is a consequence of procrastination, which is the consequence of anxiety,
which is the consequence of barely meeting ends.

Basically in order to be productive under those circumstances you have to
ignore reality, which can be problematic for the people around you.

But at the same time everything is relative on your perception of reality. We
spend today 50-100 times more energy per person that people 100 years ago, and
most of those people were happy.

We upgraded our expectations, specially because of mass media and
advertisements and feel always dissatisfied because they will compare us with
people that have more than we have.

~~~
bumby
> _people 100 years ago, and most of those people were happy._

I’m asking out of general curiosity and not snark, but is there a reliable
source to this?

A cursory search on my end didn’t return anything. I often wonder if the
obsession with “happiness” is a relatively recent phenomenon borne of our own
privilege.

~~~
pintxo
Considering it being prominently featured in the US Declaration of
Independence, it seems not to be too new.

~~~
bumby
Fair point, but that document was written by, and largely for, the privileged
class of its day. I’m more curious if there are any metrics that actually show
people were more happy in the past.

------
atlasunshrugged
I think it's important to mention some other sides of this story, namely that
the raise came right around the time his brother filed a lawsuit for him
overpaying himself and domestic abuse allegations. I don't remember the
articles exactly but there were some rumors that this change was a PR stunt
and shield for him

Some articles that talk about the other side:

[https://www.bloomberg.com/features/2015-gravity-ceo-dan-
pric...](https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/)

[https://www.hundredeightydegrees.com/investigation/2018/2/27...](https://www.hundredeightydegrees.com/investigation/2018/2/27/70k-ceo-
makes-a-mint-tortures-ex-wife-advises-on-metoo)

~~~
MetalGuru
Some of my favorites from the first article:

“Gravity’s 2014 profit was $2.2 million, Price adds. At private companies with
sales like Gravity’s total revenue, salary and bonus for the top quartile of
CEOs is $710,000, according to Chief Executive magazine’s annual compensation
survey. At companies with sales like Gravity’s net revenue, the top quartile
pay falls to about $373,000. At companies with a similar number of employees
as Gravity, the top quartile of CEOs makes $470,000 in salary and bonus. The
CEO of JetPay, a publicly traded competitor that processes a similar volume as
Gravity, received $355,000 in 2014.“

Yet his comp was $1.1MM?

“Price signed with the talent agency William Morris Endeavor Entertainment and
now charges as much as $20,000 per speech, Pirkle says.”

Or his obvious avoidance to answering the direct questions. It’s cool what he
did, but I don’t trust the guy. Or at least I doubt his motives are so
honorable. Perhaps I’m too cynical.

~~~
epanchin
If you’ve gone from earning 40k and struggling, to earning 70k, do you care
what the CEO’s motives are?

It’s been 5 years, or $150k each, and there’s been no apparent bad news. What
more do you need?

Have you changed in the last 5 years?

~~~
lonelappde
The bad news is from his brother/shareholder who claims he was deprived of his
share of profit by CEO diverting funds to his own wage, and from his ex wife
who approves extensive physical abuse.

------
curiousguy
I wonder how long it will take for the salaries to normalise comparing with
market rate. The salaries increased to 70k minimum, so they’re paying above
market rate for a few roles.

The hiring quality will also increased. For example, with a 40k salary, the
company could hire someone with 5 years of experience, with 70k, they can find
someone with 10 years of experience.

So in a few years the company will get rid of low performance and hired more
skilled workers and the salary vs skill will match the market rate again.
(with a few exceptions)

~~~
macspoofing
>I wonder how long it will take for the salaries to normalise comparing with
market rate.

When they stop growing and increased competition will cut into their margins,
and especially if they start losing money. At that point, they'll be looking
at efficiencies everywhere - and those expensive employees will probably be
laid off.

------
anentropic
> Two senior Gravity employees also resigned in protest. They weren't happy
> that the salaries of junior staff had jumped overnight, and argued that it
> would make them lazy, and the company uncompetitive.

The mentality of these people...!

Not people you want in your company

~~~
appleiigs
> he rented his house out on Airbnb to help stay afloat.

As senior employees, maybe they had stakes in the company. Maybe they didn't
want to go through the above.

~~~
sailfast
From the article it doesn’t sound like he was forcing them to take the base
salary but rather making that the minimum salary for everyone at the company.

------
davidsawyer
Can we get the title changed to something that mentions that $70k is the
minimum and not an across-the-board rate?

~~~
FalconSensei
I was also confused by this title

------
627467
There have been several CEOS who historically have paid themselves 1usd or
very low salaries. They end up making up the difference in other parts of
their comp packages. I suppose this boss is also the main shareholder so he
benefits from productivity increase.

~~~
flush
>He realised that he would not only have to slash his salary, but also
mortgage his two houses and give up his stocks and savings.

Not sure if this means ALL of his stock, but this doesn't seem to be the same
thing.

------
arayh
While I admittedly do not know any of the inside details, but if you read up
on some of the "Glass Door" reviews on Gravity Payments, you'll see a trend of
reviews commenting on the cult-like behaviour of the company. I'd suggest
doing your own research on companies you apply to before you get mesmerized by
their media publicity.

------
smitty1e
It's an excellent story.

But what works in a group smaller than Dunbar's Number[1] may not quite scale
up.

Don't let that Politician Obfuscating Near You (PONY) con you into believing
otherwise.

[1]
[https://en.wikipedia.org/wiki/Dunbar's_number](https://en.wikipedia.org/wiki/Dunbar's_number)

~~~
Mikhail_Edoshin
Indeed. There are roughly three ways to convince people to keep the discipline
needed for the collaborative work: force them, interest them economically, or
have them believing the cause. Slavery, capitalism, and monastery.

Real systems usually are mixes. E.g. Soviet system is largely slavery plus
some bits of capitalism and a lot of propaganda to cover the monastery aspect.
Or a capitalist company with a visionary leader may be quite a monastery too.

Now, the most pleasant way to work is indeed a monastery, but the one that
scales well is capitalism :) Slavery is inferior on both counts, but may work
when there's no way to add economic interest.

~~~
Pfhreak
What about worker coops? Not capitalist, but not necessarily driven by
believing in a cause.

~~~
someguyorother
Or tenured professors in fields where they could get paid a lot better if they
went private, yet they don't?

That's basically a position that makes money go away as an immediate problem,
and then the rest of the appeal is having one's hobby as one's job. Scientific
freedom and intrinsic value.

~~~
smitty1e
Or we can agree that money is the common, well-understood metric.

And immediately allow that it's not the sole metric.

------
WalterBright
Since it's working for Dan and his company, great!

> in Seattle that wasn't enough to afford a decent home.

Because the population in Seattle has grown by leaps and bounds, if everyone
could afford one of the supply of homes, the prices would go up until demand
equals supply.

~~~
eru
Well, they could also build more homes. But Seattle has somehow decided they
don't want that.

~~~
draugadrotten
when building homes, you also need to build roads, sewers, power plants,
hospitals, schools... it's not just about a few houses.

~~~
clarry
You always needed those. So why is it that you could build the first homes and
roads and sewers and power plants and hospitals and schools, but not more of
the same?

~~~
sokoloff
Do you imagine that the size of sewers, hospitals, schools, and power plants
to serve 100K people are the same size as those to serve 500K people?

If you've got existing, working infrastructure built out for population X, you
have a lot more building to do to support 5X. Often that requires tearing down
existing, functional infrastructure and replacing with larger.

~~~
eru
Yes, but it's usually less than 5x more.

I don't really see your argument. The per capita expenditure should be the
same or less.

If really necessary, just charge real estate developers for it.

~~~
sokoloff
When the sewer and water service is under existing streets and needs to be dug
up to support higher density housing, that project is enormously more
expensive and disruptive to the locals.

~~~
clarry
It's funny that city living is described as economical, ecological, and
scalable compared to suburban & rural living because of infrastructure &
transport costs. And here you're arguing the exact opposite.

So how is it? Dig up the street and build taller flats (oh no, digging up
streets is expensive!), or commit to suburban sprawl (oh no, spreading
infrastructure wide is expensive!). Pick your poison; either way people are
going to have the infrastructure they need in one place or another, unless you
kill them off.

Nevermind the the third and obvious alternative of expanding the city with
high density buildings and new infrastructure to support it. You don't have to
interconnect every sewer pipe in town just because.

------
fallingfrog
I’m very impressed by the generosity of this business owner- I don’t know if I
would have that kind of moral compass in his position.

However- it still needs to be said that we really ought to fight to create an
economic system in which everyone has the means to have a comfortable life,
even if individuals that make it up are _not_ virtuous. Because this kind of
story is a rarity, and the market will certainly punish him for his
generosity.

~~~
ianlevesque
Isn’t the point that the market hasn’t punished him? For five years?

------
macspoofing
It seems like a good initiative, but two thoughts immediately come to my mind:

1) Him making $1million salary at a small-medium company is quite a bit, but
that may be because ...

2) ... the company is clearly making a lot of money (as in a lot of profit)
and/or growing quickly. When you're growing and making huge profits at a
software company, you can afford to pay above the market rate because you have
spare cash. At some point that will change. The growth rate will plateau and
they will cut salaries (maybe not for existing employees, but for new hires),
or layoff expensive staff.

But props to Dan to get this done when he had the chance to.

------
tkyjonathan
If its minimum of 70k, then its probably a good idea, because you would only
hire if you absolutely have to.

37signals would be proud.

If you decentivize the most productive people, then you might hurt the rest of
the company.

------
pcvarmint
[https://mises.org/library/what-happened-when-one-company-
set...](https://mises.org/library/what-happened-when-one-company-set-minimum-
wage-70000)

------
misterti
I wish i was a part of this story

~~~
kzrdude
Since this is HN, I guess you should go for being the founder & CEO part of
it. ;)

------
photawe
Such a refreshing article! Nice to know there are awesome people out there!

------
Mikhail_Edoshin
As far as I know, there was an Argentine tango orchestra (one of five great
tango orchestras) led by Osvaldo Pugliese that used a similar approach.
Pugliese was indeed a communist, a member of Communist Party of Argentina, I
believe, and in his orchestra they divided all the earnings equally among
members. Was one of the most stable tango collectives.

~~~
claire-ah
As a gravity employee and tango aficionado, I find this comment extremely
relevant

------
earwetr
"His company, Gravity Payments, which he set up in his teens"... I'd LOVE to
see how a TEENAGER was able to go through the PCI-DSS certification process
and PASS the D-level.

~~~
jschwartzi
It’s possible PCI-DSS didn’t exist back then. DSS has only been around since
2004.

~~~
C12H22O11
Here is v1.0 of PCI-DSS from December 2004, same year this company was
founded. Doesn't seem very difficult to comply with, it is essentially 'Use a
firewall and antivirus and don't use the default password'
[http://ftp.freenet.at/mar/PCI_data_security_standard.pdf](http://ftp.freenet.at/mar/PCI_data_security_standard.pdf)

~~~
earwetr
now compare with [https://www.pcisecuritystandards.org/documents/PCI-
DSS-v3_2_...](https://www.pcisecuritystandards.org/documents/PCI-
DSS-v3_2_1-SAQ-D_Merchant.pdf)

------
programminggeek
Note that this story has been told and retold for years. Whatever difference
in pay he paid has more than paid for itself in press attention and marketing.

------
numlock86
Oh, that story. I remember it. A lot of the high-performers left shortly after
that. It was all triggered by some lawsuit in the first place anyway. The
"give everyone the same salary" was like a compromise to weaken the lawsuit
while at the same time to make a positive impact on media.

~~~
telesilla
Alfred Nobel started the prize because his obituary was accidentally
published, putting him in a bad light and he wanted to be remembered
differently - we benefit from this prize today, in spite of his destructive
business activities. I think it's fair to mention the fact that it was due to
Price being accused of overpaying himself that the situation got turned around
to be something valuable for his company and staff. However, I don't think
it's fair to vilify him in the present day and discredit the results.

~~~
busyant
This would be an interesting motivational tool. Have someone write your
obituary and then see if you're happy about it. Modify your life accordingly.

~~~
jdsalaro
With respect to preparing one's own obituary in advance the following quote
came to mind:

"In journalism, we recognize a kind of hierarchy of fame among the famous. We
measure it in two ways: by the length of an obituary and by how far in advance
it is prepared. Presidents, former presidents, and certain heads of state are
at the top of the chain."

\- Walter Cronkite Quotes

American - Journalist November 4, 1916 - July 17, 2009

------
adultSwim
Why can't we do tech co-ops?

------
jmkni
The BBC basically providing free marketing for a company, yet again!

~~~
epanchin
So you don’t think this is unusual enough to be newsworthy?

~~~
lonelappde
The article is not news, it's uncritical uninvestigative PR.

~~~
yitchelle
Why can't this article be news as well? I found it to be quite interesting.

------
StanislavPetrov
Anyone who was worked a job where low wages are paid (either as a worker
receiving low wages or in a managerial position) knows that there is an
extremely tangible effect on work quality and productivity.

Workers who feel they aren't being fairly compensated for their labor don't
work as hard. They don't show as much attention to detail. They don't have any
loyalty to their employers, who they perceive as exploiting them. They are
much more likely to quit or leave at the first opportunity for any job that
seems better. They aren't invested in good customer service. They grow to
resent their employers when they work full time and still don't make enough to
afford basic necessities.

Its no surprise to me that paying workers a living wage (or even something
close) results in measurable benefits for a business, in a variety of ways
(not to mention immeasurably improving the lives of employees).

Further (since this seems like such an alien concept to most high-wage, HN
members) getting paid a decent wage also allows massive benefits to the
economy and society at large. We're currently looking at a global pandemic
with the coronavirus. Given the apparent virility, it seems inevitable that
this virus will spread to every country in short order. Most low wage workers
don't get sick leave. Many get fired even for taking unpaid sick days. These
are your cashiers, your grocery store workers, the people who make your coffee
- the service industry workers who make up the bulk of American labor. Even
those workers who won't get fired for taking sick days, often can't afford it.
We've all seen the stats about the huge number of Americans who cannot afford
an emergency expense of a few hundred dollars. Staying home sick qualifies.
The containment efforts we've seen in South Korea and Italy have (so far)
largely failed - and these are countries with universal healthcare and worker
protections that we don't have. Right now it costs $3,200 to get tested for
the coronavirus in the United States. Not treated - just tested! Working
people cannot afford this and will not get tested, or treated - which will
make the crisis worse. How much will this crisis end up "costing" us in the
long run? If not this one, how much will the next, inevitable one cost us,
because working people don't have the income or benefits to take care of
themselves?

Massive kudos to this guy for paying his workers a fair wage. Hopefully other
employers are enlightened enough to follow his lead and do the same, with the
understanding that paying adequate wages benefits not only their business, but
society and the economy at large.

~~~
lotsofpulp
> Its no surprise to me that paying workers a living wage (or even something
> close) results in measurable benefits for a business, in a variety of ways
> (not to mention immeasurably improving the lives of employees).

Not if their work doesn’t really differentiate the product. I have all the
research I need about products from the internet, so I don’t need a store
employee to sell me anything. Same with many other low paying positions. They
are low paying because customers aren’t valuing the extra benefits of a non
plug and play staff.

~~~
StanislavPetrov
Spoken like someone who has never worked in a low-wage job, owned a business,
or managed low-wage workers.

There are low-paying jobs for a variety of reasons, including in large part,
corporate welfare for the largest employers, like Wal-Mart, which the
government subsidies at taxpayer expense to facilitate the payment of
starvation wages.

[https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...](https://www.forbes.com/sites/clareoconnor/2014/04/15/report-
walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/#5e7e3d7e720)

As far having everything you need for your products due your internet
research, I hope you will enjoy the coronavirus (or whatever other
communicable disease you acquire) as an added bonus from low-wage workers who
are unable to call in sick. The people who brew your coffee, make your
sandwich, park your car or do a million other things that allow our society to
function. Perhaps when your mother, your aunt or child dies because they were
needlessly infected by a low-wage worker who couldn't afford to seek treatment
or call in sick to work you will factor that "worth" into their perceived
value.

~~~
lotsofpulp
I do own businesses that employ low wage workers, and have managed them
myself. The claim I was responding, and am disputing, was that paying workers
above market rate will result in benefits for the business.

There are very few businesses who target the upper middle class or those with
a little bit of disposable income that can afford to go above and beyond for
their workers, like Nordstroms, Costco, Apple, Trader Joes, etc. If you
notice, these businesses are all located on the rich side of town, and usually
there's only 1 or 2 for medium size cities.

You simply won't survive as a business if you pay workers more hoping to get
something out of them when the customers don't value it, and reality shows
this. If you want to increase the standard of living for low wage workers, one
needs to support politicians who will pass legislation mandating paid time
off, de-coupling health insurance from employers, parental leave, increasing
minimum and overtime wages, reducing # of hours before overtime kicks in, etc.

This isn't a problem a single business can solve, it's a society wide issue
that needs a society wide solution.

------
shahedshah
While I like good-feel news such as this, there is more to the story than
meets the eye. Buried in the comments are links to news sources which go into
further legal details.

------
themagician
We’re getting there in some places. Minimum salary in California is now $54k.
By 2020 it will be $62k.

------
anonsivalley652
Note: I heard this story around 2015-2016.
[https://news.ycombinator.com/item?id=9371854](https://news.ycombinator.com/item?id=9371854)

I'm not sure which is more applicable:

1\. Hurray, decency.

2\. Shouldn't getting excited about what would've been middle-class income 70
years ago be a sign how far workers' pay has fallen?

~~~
travbrack
Huh? Inflation calculator says 70k in 1950 is worth 754k today.

Edit: I did the calculation backwards. Thanks to everyone who pointed that
out.

~~~
primitivesuave
By the other interpretation of $6500 dollars in 1950 (roughly equivalent to
70k today), it would be much higher than the average family income of 1950 of
$3,300 and put you in the top 10-20% of earners, which is probably not as far
as 70k gets you today.

~~~
luckylion
Comparing family income 1950 with a single income in 2020 though. Have two
incomes of that size in a family, and you'll be at 140k, which will put you in
in that range.

~~~
oblio
I'd agree with you, but. In 1950 the average family was very likely to live on
a single income, the husband would be the earner and the wife a housewife.

I'd be curious to see the numbers for my assumption, though.

~~~
luckylion
Yeah, from what I understand, inflation-adjusted family income has remained
largely stable for the lower 80% despite significantly more families having
more than one income, which sounds plausible, given that more supply should
decrease the price of labor.

------
wantedjean
Only for the free PR, it was worth it...

------
bufferoverflow
This is very nice of the owner, but extremely inefficient economically. Which
means most companies can't afford to do something like that. Only if your
profit margins are huge.

~~~
fsloth
Ineffficient? It would depend on the total value add of each employee. As
stated, the performance of the company increased. The capability of individual
employees increased.

Now, without exact numbers, I can't say economically this or that.

But effectively this was not a zero sum game. The company was not paying more
for the same outcome, they were paying more for more output.

The output of the company increased. This is how investments are usually
supposed to work, you put money in, and reap profits.

What makes this a bit more difficult to gauge that it's likely the increased
performance does not come from individual output, but from a better cohesion
of the team which generally makes things always easier and efficient.

What people often get wrong is that they think about wages atomically - I pay
_this_ guy this much and _he_ delivers this. Whereas when you are having a
team of workers (whose job is not to be a mindless drone) and whose output
depends on the co-operationnof the individuals, often the second order effects
are more important.

For example: rewards. You give a huge reward to the single top performer in
your company. What happens? Everybody becomes jealous of him, and some will
feel cheated since they contributed heavily to the projects the individual
participated in. Future collaboration will likely suffer.

In fields were output is purely of individual performance (some sales jobs,
logging, etc) this calculus is of course different. In these situations the
atomic cost analysis probably works.

~~~
kqr
Even sales benefits immensely from cooperation over competition. Imagine e.g.
holding on to more leads than you have time to follow up because you don't
want to risk giving them away to "the top performer" of the sales team.

------
yitchelle
I wonder how he arrived at 70K? 100K is just as arbitrary as 70K?

~~~
driverdan
Read the article.

~~~
yitchelle
I did before I posted my comment. It says "After crunching the numbers, he
arrived at the figure of $70,000."

"Crunching the numbers" does not give details as to how he arrived to 70K. The
article made a reference to report by Daniel Kahneman and Angus Deaton, but it
is not clear.

Have I missed something?

------
golemotron
The things you can do when you're in a high margin non-competitive market.

~~~
Pfhreak
Amazon is low margin, Bezos could give up more wealth. Grocery stores are low
margin, but I'm sure you could reduce the pay of Kroger's ceo. I'm trying to
think of a company whose ceo makes millions that couldn't take similar steps
to increase worker pay at the ceos expense and coming up with nothing.

------
ecmascript
Such an inspiring story, I wish more people were like Dan Price.

~~~
KSteffensen
I wish more people were like the Dan Price in this story.

------
Lapsa
I'm bit jealous of that Tesla. And I don't even have driver's license nor care
about car models. Gifts are underrated.

------
voltrone
And what about that one employee that tend to work more than the others(every
company have one of those, maybe it's you), do you find it fair for him to get
the same salary as everybody ? why would you better yourself and be more
productive only to get paid the same as everybody.

~~~
dsr_
Yes, it's fair. If you don't like the conditions, go work somewhere else: it's
not a company town where your choice is work for BigCo or move.

------
rafaelvasco
What this guy did is a thing that most people wouldn't even consider. Looking
outside of him and caring for other people more than himself, sacrificing
himself for others. I won't say that he was right or wrong but that state of
consciousness of seeing beyond your own ego and empathize with others like he
did is a thing that we as humanity must nurture within ourselves if we want to
survive and prosper in the long run. Prosperity and progress is not about
power and money, it's about social communion and caring about others as much
as we care about ourselves.

~~~
skizm
He raised everyone’s pay in response to a lawsuit that claimed he was paying
himself too much. Also it gives the company less profit so if he has to buy
out his partner (as a result of the lawsuit), he can do so for less.

~~~
rafaelvasco
Doesn't invalidate what I said I think;

~~~
shkkmo
It doesn't invalidate your point that it would be beneficial did what he
claims it did. It might invalidate your assertion that he was:

> Looking outside of him and caring for other people more than himself,
> sacrificing himself for others.

~~~
rafaelvasco
Yeah, agreed. So the point remains, though it doesn't apply to him, but to
people in general.

