Gravity Payments CEO Dan Price announced on Monday, April 13 that he would raise the minimum wage of his employees to $70K. Gravity Payments is a start-up credit card payment processing company in Seattle, Washington.
Price's employees were financially struggling regardless of the fact that they made above minimum wage, an average of $48K yearly. Price wanted to ease the financial burdens of his employees without polarizing his clients. He found a solution for raising the average wage of his workers without charging his clients more for services. Price took a steep paycheck cut and pocketed the extra expenses from the company's 2014 profit revenues.
"They were walking me through the math of making 40 grand a year. I hear that every single week. That just eats at me inside," said Price in an interview with The New York Times.
Price read about the findings of psychologists Angus Deaton and Daniel Kahneman. Deaton and Kahneman's studies stated that "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" increases in proportion to wage earned. Their studies suggest that the aforementioned emotional equality of life rises to a certain point; $75K yearly.
Price created the company when he was a college student at Seattle Pacific University. He got the idea for it when used to play in a café with his band. When owner of the café faced issues with credit card transaction fees, Price stepped in to help. Price realized that he could help out small businesses by providing the same service for less.
