Tags: minimum wage

Minimum Wage — $70,000 Per Year?

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Sunday, 06 Sep 2015 10:13 AM Current | Bio | Archive

Typically leftists are insulated from the consequences of their bad ideas by a nice cushion of money, but Dan Price cut it a bit too close. Price is the CEO of Gravity Payments and his company has learned what goes up may come down — hard.

Back in April, Price announced to the world that he was raising the minimum wage for his staff of 120 to $70,000 a year. Price told The New York Times he intended to get the money by cutting his $1.1 million salary and using up to 80 percent of the company’s projected $2.2 million profit.

Blowing all the profit for salaries, with almost nothing left for investment or contingencies, would qualify Price to challenge Hillary for the nomination, but it looks like his plate is full at home.

This “social justice” exhibitionism is hard to understand because Gravity Payments wasn’t exactly a Nike sweatshop before the announcement. The company’s website boasts these benefits:
  • Medical, dental, and vision insurance
  • Unlimited paid time off
  • Flannel Fridays
  • Company-sponsored outings
  • Catered breakfasts and lunches
I realize it’s not a cushy as working for the Patent & Trademark office, click here for details, but conditions weren’t bad for the private sector. While the rest of leftist America is fighting for a “liveable” $15 per hour wage, the average employee at Gravity was already making $23 per hour for a total of $48,000 a year.

So as Mr. and Mrs. Slowsky used to ask: “Where’s the fire?”

It began on a hike with a friend who related how hard it was to live on $40,000 a year. Price said the travail “just eats at me inside.” Then Price made the mistake of reading an article on “happiness research” that found “emotional well–being” rises with income.

Too bad Price failed to read The Guardian that debunked much of what passes for psychological research. Scientists seeking to examine the validity of 100 studies previously published discovered, “a whopping 75 percent of the social psychology experiments were not replicated, meaning that the originally reported findings vanished when other scientists repeated the experiments.”

Price could have bounced his idea off a Magic 8–Ball or Bernie Sanders and had a better chance at an accurate answer.

A better gauge of happiness in a business is concrete data like turnover, productivity, profit and if your tires have been slashed in the parking garage. Since Price was already paying $23 per hour it would have been cheaper to hire employees that can manage to live on their current salary.

Once the euphoria abated, employees that had been working hard before the windfall began to have second thoughts. When they voiced those thoughts Price proved to be another self–righteous leftist using insults for argument.

The Times describes Maisey McMaster as “one of the believers.” She put in long hours for five years building the company with Price. She was even part of the team that ran the numbers to see if Gravity could afford the new minimum.

Then she considered her situation, “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.”

McMaster approached Price with an alternate plan that would raise pay and recognize employees who went the extra mile. “He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me.” So she resigned.

McMaster is not alone, nor is Gravity. Walmart discovered its new minimum of $9 per hour is backfiring, too. Bloomberg News reports: “It is pitting people against each other … Apparently experience doesn’t get rewarded.” That’s what happens when individual initiative is traded for “paycheck justice.”

Now Price is losing employees and being sued by his investor brother, which threatens the company’s existence because after the salary jackpot there are no reserves to fight a lawsuit.

What’s sad is Price was already setting a good example. Currently greedy chief executives, with zero sense of shame, make more than 300 times what the average peon earns. Price was only making a bit over 20 times the average wage, which is in line with what management expert Peter Drucker recommends.

Now Price is taking in renters to cover mortgage payments after his salary seppuku, longtime clients are leery of a politicized firm and internally the morale of the hard working employees declines as they witness the result of salary socialism.

Price’s problem was he wasn’t interested in less showy ways to help his employees like profit–sharing, stock options and incentive pay. Instead he went with the big splash that got him in the New York Times and his company in trouble.

Of course on the plus side there’s been an avalanche of job applications . . .

Michael R. Shannon is a commentator, researcher (for the League of American Voters), and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian’s Guidebook for Living in Secular Times (Now with added humor!)." Read more of Michael Shannon's reports — Go Here Now.
 


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MichaelShannon
Back in April, Price announced to the world that he was raising the minimum wage for his staff of 120 to $70,000 a year.
minimum wage
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2015-13-06
Sunday, 06 Sep 2015 10:13 AM
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