Just three months ago, Dan Price was a progressive hero. To much fanfare, Price, CEO of Seattle-based Gravity Payments, announced he was raising the minimum salary for employees of his company to $70,000, and taking a $930,000 pay cut himself to help pay for his new minimum wage. Three months later, the experiment does not go well.
Price has had to rent out his own house to help cover his bills. In addition, the New York Times reports Gravity lost two of its most valuable employees whose departure was “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.”
Most of the company’s profits, $2.2 million last year, were reinvested in the company not to expand or innovate, but to cover the new minimum wage.
Price’s brother and Gravity co-founder, Lucas Price, has also filed a lawsuit against the company that it, thanks to the new higher payroll, finds itself having difficulty paying legal fees for.