If there’s something that some people won’t stand, it’s the idea that someone else is getting something that they’re not getting — or, occasionally, that other people are getting anything at all.
The New York Times this afternoon has the nearly unbelievable story of what happened when an owner of a credit card processing company slashed his own pay and set a $70,000 minimum salary for employees at his firm.
“Income inequality has been racing in the wrong direction,” Dan Price said. “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”
Well, that’s just crazy talk.
Listen Dan Price at the Aspen Ideas Festival (MPR News Presents)
July 21, 2015
He lost a lot of business because people thought he was making a political statement, the Times says.
Several customers who accused him of communist or socialist sympathies that would drive up their own employees’ wages.
But it’s the pushback from his firm’s own employees that’s stunning.
The new pay scale also helped push Grant Moran, 29, Gravity’s web developer, to leave. “I had a lot of mixed emotions,” he said. His own salary was bumped up to $50,000 from $41,000 (the first stage of the raise), but the policy was nevertheless disconcerting. “Now the people who were just clocking in and out were making the same as me,” he complained. “It shackles high performers to less motivated team members.”
Mr. Moran also fretted that the extra money could over time become too enticing to give up, keeping him from his primary goal of further developing his web skills and moving to a digital company.
Where I come from, we call these “The Golden Handcuffs.”
“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,” another employee said.
Some employees stayed, but now they’re more unhappy with the money.
Am I doing my job well enough to deserve this?” said Stephanie Brooks, 23, who joined Gravity as an administrative assistant two months before the wage increase. “I didn’t earn it.”
It’s not all bad.
José Garcia, 30, who supervises an equipment team, was able to afford to move into the city and replace the worn tires on his car. Ms. Ortiz, who was briefly homeless as a child, can now visit her family in Burlington, Vt. Cody Boorman, 22, who handles operations out of his eastern Washington home, said he and his wife finally felt financially secure enough to start a family.
As for some clients, some of them did end up raising the pay of their workers, too.
There have been other ripples. Mario Zahariev, who runs Pop’s Pizza & Pasta, switched to Gravity after seeing Mr. Price on the news. When he learned his monthly processing fees would drop to $900 from $1,700, Mr. Zahariev decided, “I was not going to keep the difference for myself.” He used the savings to raise the salaries of his eight employees.