A Seattle entrepreneur announced on Monday that he was raising the minimum salary at his company to $70,000 and reducing his own pay to the same amount from the current level of about $1 million.
Dan Price, the founder of Gravity Payments, told the CBS Evening News that he was inspired by a Princeton University study that showed that emotion well-being rises with income rises up to $75,000.
Price related to CBS that “I realized that people who are making less than that, there is an emotional cost that they have every single day and you only get to live once.”
Price also related that wanted to raise the minimum pay for his employees out of concern regarding income inequity and a desire for his workers not to have to worry about paying for “the basics.”
“Seattle is not the most affordable city and I want everyone that I know and care about to be able to do all the same basic stuff that I do,” Price said. “I want them to be able to drive whatever car they want to drive as long as it’s reasonable, live in a decent place. Just all the basics.”
NBC News reports that “many of Price’s employees earn just shy of $40,000,” that of the company’s 70 employees, 30 will see their salaries doubled.
The wages will be increased to that level over the course of the next couple of years, with the minimum wage being raised to $50,000 immediately, t0 $60,000 in 2016, and to $70,000 in 2017.
Employees can be seen reacting to Monday’s announcement in the video, below. At first there was silence in the room with employees mouthing “oh my God,” and looking shocked, but after a few moments they broke into a standing ovation.
Price told his employees, “I would not do this if I thought I was doing anyone a favor,” adding: “I just think this is what everyone deserves.”