Conservatives get so tired of the civil government forcibly redistributing our wealth, sometimes we forget that voluntary redistribution of wealth is not just allowable, but commendable. Regardless of his political convictions, I applaud the active generosity of Dan Price, the CEO of credit card processor Gravity Payments. He has taken the minimum wage issue into his own hands by promising $70k a year minimum salary to every one of his employees.
His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000. . . .
If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year.
You may wonder how such a move is possible. There are certainly issues that would need to be addressed. For instance, Price can reduce his own salary to $70,000 a year without affecting his business. But what about redirecting his company’s profits into boosting the minimum wage of his employees? Will that make it harder for Gravity to invest in R&D, market expansion, or new services? Will lower profits make Gravity less attractive to potential investors?
I don’t think so. Having satisfied and loyal employees is the ultimate intangible in a successful business model. I wish more CEOs would take the minimum wage and income inequality “problems” into their own hands. If we were fixing these things privately and voluntarily, the civil government would have even less legitimate reason to intrude.