A STARTUP FOUNDER has made his own effort to cut income inequality in the US.
He is cutting his own pay while seriously boosting that of his employees.
Dan Price, who is the founder and chief executive of payment processing startup Gravity Payments, has cut his own salary by 90% to set a $70,000 annual minimum wage at the firm.
“We’re going to have a minimum of $70,000 for everyone who works here,” Price said in an announcement to staff.
The pay boost will be phased in over the next three years, with the lowest-paid employees getting at least $50,000 by the end of this year and the $70,000 pay level reached by December 2017.
Price told staff that his own $1 million annual salary is “really high” and that he had decided to reduce his own pay to the same as other employees “until our profits go back up.”
The announcement drew wild applause from employees at the Seattle-based firm that employs more than 100 people. It comes amid an ongoing debate about wealth, wage, and income inequality in the United States.
Price told the MSNBC Morning Joe show that staff who had started with him had begun earning $24,000 and he felt guilty about the disparity.
“I was wishing I could be part of this inequality problem, so I was happy to come up with something to try. But I might be crazy.”
He said that he wants to find a “capitalist solution to a large social problem. He highlighted a Princeton study that says that around $70,000 a year, people become happier.
“I hope that this allows people unleash their passion and focus on their work.”
The company, which employs 120 staff, is expected to make $2.2 million in profits this year. Price will cut his own salary to $70,000.
He said he had done a risk analysis on the move, but said that clients were “really proud” of the move and that many businesses were aiming to do the same.
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