Business owner who promised all employees a $70,000 ‘minimum wage’ is now fighting to stay afloat

A Seattle-based business owner who created a sensation by promising to end income inequality among his employees is now reaping the consequences of using his company as an experiment in redistribution.

Dan Price, CEO of Gravity Payments — a credit card processing company — announced earlier this year that he would begin paying all of his employees a minimum annual salary of $70,000. He pledged to absorb a lot of the extra cost personally, by “slashing his own million-dollar pay package to do it,” according to The New York Times.

“[A]lmost overnight, a decision by one small-business man in the northwestern corner of the country became a swashbuckling blow against income inequality,” the Times continues.

Now that stand against income inequality is unfolding in the most predictable of ways: Price, reports Fox News, “has fallen on hard times.”

Some of Price’s trouble has been brought on by his propagandizing. “[A]few customers, dismayed by what they viewed as a political statement, withdrew their business,” reports the Times.

But most of Price’s downfall has to do with the financial and psychological ramifications of attempting to treat everyone in his organization equally — at a high level of compensation.

From the Times’ report:

Two of Mr. Price’s most valued employees quit, 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. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees.

Couple that pesky intrusion of human nature with the drain that paying all your employees $70,000 imposes, and Price has a full-scale crisis on his hands. Most of the $2.2 million the company earned last year has been “plowed into the salary increases,” the report states.

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