Dan Price, the CEO of an online payments company who vowed to pay all his workers a wage of $70,000 a year, is back in the news after a recent BBC profile. Price first made the promise in 2015, phasing in the raises over several years. Now that enough time has passed to render a tentative verdict, journalists are doing just that. It seems to have been a success.
The company is called Gravity Payments and is an online payment-processor that aims to undercut the commissions charged on credit card transactions. It has a few hundred employees and is a fairly minor player in the payment-processing universe, though the wage hike has made headlines nationally.
According to the BBC profile, the company has gone from processing $3.8 billion in payments to more than $10 billion. Workers are also much more productive. But there is one achievement in particular Price was happy to brag about.
“Before the $70,000 minimum wage, we were having between zero and two babies born per year among the team,” he told the BBC. “Since the announcement – and it’s been only about four-and-a-half years – we’ve had more than 40 babies.”
The Gravity Payments experiment was pilloried in conservative media when Price announced it; Rush Limbaugh wasn’t a fan. Perhaps one reason is that it suggests there are underlying economic reasons, and not only cultural ones, why young people are delaying starting their families and having children. The $70,000 minimum wage project also reflects somewhat unflatteringly on the overwhelmingly left-wing tech business as a whole, which, despite its progressive cultural ethic, has not delivered on its promise of spreading prosperity.
Silicon Valley has fuelled the rise of the gig economy’s unstable jobs, and the largest tech platforms have been accused of capricious and even abusive behaviour towards content creators.
Price grew up in an Evangelical household in south-western Idaho and was home-schooled until he turned 12. To fund the wage hike, Price cut his own compensation and mortgaged his house, not exactly leaving him poor but staking his own financial wellbeing on the success of the company.
In a time of absentee CEOs who spend five years at a company right after earning their MBAs, Price’s style of management is an even more welcome change.