Many people would tell you that money isn’t everything. But throw hefty student loan debt, bills, and other expenses into the mix, and I think we could all agree that money is still incredibly important in our day-to-day lives. We’ve seen on the streets what a lack of money can do. People are without a home to stay warm, food to keep their bellies satisfied, and water to keep clean and hydrated. If you don’t lack any of the latter things, consider yourself lucky.
Dan Price, the 34-year-old CEO of the company Gravity in Seattle, Washington, might be a millionaire, but he still understands the struggles of living in an expensive city. That’s why five years ago, Price happily cut a million dollars into his own salary to ensure all 120 of his employees could make at least $70,000 every year.
Price had the idea when he was hiking with his ex-girlfriend and good friend, Valerie. The veteran informed Price that she was working 50 hours a week just to pay her bills. The sudden $200-a-month increase on her rent only made the situation harder. Although the owner of Gravity has been giving his employees 20% pay raises each year, Valerie’s situation made him feel the need to do more.
That’s when Price felt driven to put all his staff on $70,000 salaries. And since the boost, Price believes that a lot of good has come out of it.
“There was a little bit of concern amongst pontificators out there that people would squander any gains that they would have. And we’ve really seen the opposite,” he explained.
One way he knows this is because many of his team members are now financially able to start and raise a family.
“Before the $70,000 minimum wage, we were having between zero and two babies born per year amongst the team,” Price said. “And since the announcement – and it’s been only about four-and-a-half years – we’ve had more than 40 babies.”
But that wasn’t the only benefit he saw.
A particular employee stood out to the CEO: a gentleman who was so focused on his transportation to work each day that he had little time to care for himself.
“He was commuting over an hour and a half a day,” his boss said. “He was worried that during his commute he was going to blow out a tire [sic] and not have enough money to fix that tire [sic]. He was stressing about it every day.”
But as a result of that pay increase, the employee was able to move closer to his workplace, afford healthier food, and spend more time exercising. And he has lost over 50 pounds since!
The Director of Sales at Gravity, Rosita Barlow, has even noticed that her colleagues seem to be happier at work and more productive overall.
“When money is not at the forefront of your mind when you’re doing your job, it allows you to be more passionate about what motivates you,” she said.
Although Price is very happy with the salary increases, he admits that he still struggles with the idea of the size of his own income.
“There are tests every day. I’m the same age as Mark Zuckerberg and I have dark moments where I think, ‘I want to be just as rich as Mark Zuckerberg and I want to compete with him to be on the Forbes list. And I want to be on the cover of Time magazine, making lots of money.’ All these greedy things are tempting,” he admitted. “It’s not like it’s easy to just turn down. But my life is so much better.”
Below, CEO Dan Price talks more about his voluntary pay cut on The Kelly Clarkson Show. Check it out!
