When Dan Price announced back in April that he was going to set the minimum annual salary of every employee in his small Seattle business at $70,000, he found himself in a super-storm of publicity, much of it highly favorable to the CEO of Gravity Payments. But now — in the city that’s become the virtual epicenter of the debate about and the grand experiment for a radically higher minimum wage — it seems that Price is unable to overcome the force of economic gravity, as his credit card payment processing firm has reportedly fallen on hard times.
In writing about the price of harsh reality that Price is now paying, The New York Times has certainly tried to paint the businessman in a most glowing light, calling his effort “a swashbuckling blow against income inequality.” The left-leaning paper goes on to cite the unintended consequences of Price’s “swashbuckling” foray into what many might call a fantasyland of economics and capitalism:
…a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase — despite repeated assurances to the contrary — also left. While dozens of new clients, inspired by Mr. Price’s announcement, were signing up, those accounts will not start paying off for at least another year.
In addition, notes the Times article, Price had to hire new employees — at the artificially high salary — to handle the flood of new business inquiries and applications. And then there were the existing employees who saw the abrupt raises given other workers as unjustified, unfair, and altogether disconcerting. Some gave up and quit.
“Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises,” reports The New York Times.
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The Fox News coverage of the problems for Gravity Payments points out the hard personal times that have quickly befallen the man many hailed as a hero — a hero of the movement to make workers’ pay more in line with that of a company’s executives. Price slashed his $1 million pay package to help offset the $70,000 salaries he abruptly imposed for his staff of 120.
“I’m working as hard as I ever worked to make it work,” [Price said] in a video that shows him sitting on a plastic bucket in the garage of his house. “I’m renting out my house right now to try and make ends meet myself.”
And then there’s the nasty family feud that’s been touched off by Price’s sudden decision to up his company’s minimum wage far beyond the $15-an-hour mark recently mandated for the city’s businesses by the Seattle City Council. The Fox News report points out that Price’s older brother filed a lawsuit within days of the announcement of the pay hike, the impact of which was heard round the world of progressive politics:
Lucas Price, who owns 30 percent of the company, accuses his brother of taking millions of dollars out of the company while denying him the benefits of his minority ownership.
The lawsuit has forced Gravity to pay mounting legal fees at a time when the new salary scale is being eaten up by profits.