http://www.today.com/money/gravity-payments-ceo-dan-price-raising-minimum-pay-70k-t15246 Guy says people are happier if they make at least 70k so here you go. Socialism at its finest. This will not end well.
While his intentions are noble, if there is no specific action or goal or measurement, then it's not much more than a "nice thing". Certainly life can be easier with more money but if a worker is addicted to gambling for instance, then nothing will change or may even get worse. If an employee doesn't have a specific guideline for how their pay leads to results, or more importantly, company results, then any success here will be difficult to ascertain. Not everyone wants to be the top dog....too much responsibility. There are two companies out here that tried something similar, one with solid success and one that failed because the company did not change with market/customer demands. AST Research paid annual bonuses of up to 3x worker salaries. That company failed. Kingston Research deployed a payout after employees had helped to create company value...."On December 14, 1996 John Tu and David Sun allocated $100 million for employee bonuses as a result of the acquisition, averaging $130,000 for each of the company's 550 workers". Kingston is still going strong.
Duuuh! You simply don't understand what socialism is, you never have. Not my problem, buy a dictionary. This is capitalism at its finest. It is a corporation choosing freely to pay their workers better. This is the way it was in the 20th century and still is in most of the world, but American corporate executives have been paying themselves scandalously higher and higher salaries and huge bonuses while their workers salaries did not even keep up with inflation. 50 years ago CEO's make 20 times the average workers salary. Today they make over 300 times the average workers salary. Since 1978 their pay has increased 937% while workers pay increased 10.2%. Smart executives realize that this can't go on.
The key point IMO is that it's the private decision of the owner not a government fiat. There is a history going back to Henry Ford through COSTCO. Where companies paying higher wages than their competitors have been successful. It shows the variety and health of the marketplace of ideas. Government mandated wage levels have a history of failure including as recently as in Washinton. The Seattle newspapers are reporting many small businesses failing or being forced to let people go due to the recent law raising the minimum wage. Another piece of evidence confirming years of research than force minimum wage causes net job loss.
I saw that story yesterday. Its gotta be some kind of a gimmick. The CEO slashed his own pay from over $1 Million a year to the same $70K that everybody else will be getting. Nobody does that unless the Million was only a small part of his compensation package. I would bet he still has his bonuses and stock options. If somebody is making $40K the work he produces is probably worth from $30K to $50K and the company hopes to make some profit on his productivity. If a person all of a sudden starts making $30K more than he had been making it doesn't mean that the value of his output will increase correspondingly. If I worked there I would gladly accept the pay raise and would try to work a bit harder to prove it was justified but I wouldn't work almost twice as hard.
Actually, the evidence is overwhelming that minimum wage does not cause job losses. http://www.cepr.net/documents/publications/min-wage-2013-02.pdfhttp://www.fiscalpolicy.org/FPISmallBusinessMinWage.pdf The Seattle experience indicates that you can make the minimum wage too high and too quickly, but it is very apparent to any unbiased observer that the current minimum wage is too low. The evidence is clear when fast food companies like McDonalds and Taco Bell have paid more than minimum wage for years. They just can't keep employees to work for a salary that places them in the poverty range. Construction laborers make more than minimum wage. Unemployment is low right now and all wages have gone up. Minimum wage must follow suit. The only places that can get away with hiring at minimum wage is the agricultural migrant workers industry, the hotel maids and janitors, and unskilled laborers. These jobs don't require proficiency at English and are filled with illegal aliens. All minimum wage does is insure that there are jobs for illegal immigrants and none for poor Americans.
There is no stock options or bonuses. The CEO owns the entire company. What he has done is cut his $1,000,000 salary. Even after the new salary structure, the company makes a $600,000 corporate profit.
Whether it is a good business move or not will play out as time progresses. He owns the company and can do as he thinks best. Whatever his reasons he is doing it of his own free will NOT government fiat.
I like the principle of the move but the volume of it isn't smart business imo. I share his desire for my employees to have a living wage and to provide benefits that help me retain good talent but that kind of jump in pay will never show an equally incremental rise in productivity. A $10,000 year raise along with a few extra duties to increase productivity would have been a more savvy move imo. That said, it's his company and maybe he'll prove me all wrong. It is definitely not socialism, but it definitely is a forgotten part of capitalism
