$70K..Base Salary! Paying Employees "Liberally" Pays With More Satisfied And Happy Customers

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Dan Price, Gravity Payments, the fair and benevolent capitalist,

A few days ago we published a piece about an electronic payments company CEO, who reduced his million dollars compensation while establishing a $70,000 baseline pay rate for his employees.

Yes, the story is very much a Cinderella tale, and a story so rate it drew international attention.

Our version of the story…..

Some Progressive Millionaire CEOs Embody An Idyllic America

Apr 16, 2015 … Earlier in the week MSNBC’s ALL In host, Chris Hayes, interviewed Dan Price. The interview was both an existential non-common reality and a…

We referred to Price as the benevolent capitalist, but know the phraseology has no negative association.  I am reminded of yet another old axiom: 

“Happy employees lead to happy customers and that leads to more and happier customers.”

UPWorthy, Patrick Malloy, curated a story about Price and the aftermath of his very public story.

UPWORTHY

Right after announcing he was taking a pay cut to raise employees’ salaries, business is booming.

 Curator: Parker Molloy

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Here’s a story to show your boss. When it comes to taking care of his employees, Gravity Payments CEO Dan Price is going above and beyond (and business has never been better).

You might have heard a story from a few weeks ago about a CEO named Dan Price and his plan to raise the starting salary for his employees to $70,000 per year.

He told his employees about the change at Gravity Payments, his credit card processing company, during their quarterly staff meeting.

Needless to say, they were pretty excited about the news, giving him a standing ovation.

CBS News interviewed 29-year-old equipment supervisor Jose Garcia about the change. He said that he cried when he told his mom about the raise.

Before the announcement, Garcia’s salary was $33,000 per year. The raise was a huge deal to him and others at the company.

Over the next two years, salaries will increase periodically.

Effective immediately, everyone in the company will make at least $50,000 (or, if they already make more than $50,000, they’ll get a $5,000-per-year raise). From there, all employees will be bumped to $60,000 next year, and $70,000 the year after.

How is Price doing this? To start, he took a huge pay cut.

He had been making $1 million per year. But now? He’ll take home just $70,000 per year.

Price was motivated to change the salary structure after reading a 2010 study that suggested people have the highest emotional well-being at $75,000.

Would raising the salary of someone like Jose Garcia from $33,000 to $70,000 have a tremendous impact on his happiness? Likely! Is it the same for someone already making well over $75,000 per year? According to this study, no.

Business has never been better.

Price tells CNN Money that in the 11 years he’s been running Gravity Payments, he’s never seen a better week for new business after bringing in dozens of new clients.

 “In the short-term, [news reports about the pay] could help demand for our services, but clients won’t stay with a company that’s not providing a superior value.” 
— Dan Price

Morale is high, and applications are flying in faster than ever before.

It turns out that offering people a living wage with competitive benefits makes people want to work for you. Who knew?

They’ve received about 3,500 job applications for the company’s two open positions (a sales representative and a support staffer), which is around 10 times as many as they’re used to.

He’s putting people before profits.

Based on that study, he realized that making less than ideal wages is emotionally taxing on a person. So if he’s in a position to help make the world a better place for the people around him, why wouldn’t he?

He cut the company’s immediate profit projections in half, but he seems pretty happy with how that’s working out so far.

After all, there’s a reason Price was named 2014’s “Entrepreneur of the Year“ by Entrepreneur Magazine.

And it probably has to do with making gutsy decisions like this (and possibly looking ridiculously good in a blazer).

Check out the CBS News report about Price:

Business can exist without employees as underpaid product or services producers. Yet, business cannot exist without employees. While rices experience is unique and accompanied by progressive thought, reasoning and data, most companies can stand to advance the level of wages and compensation. When we consider images like those that following, the rational person would ask the question: “Why do US CEO’s have to exist as corporate rock stars or overpaid professional athletes?” Are their contributions so significant less compensation wouldn’t attract comparable competency.

On the liberal side of compensation data.

And, on the conservative side of compensation data.

While 2008 is ions ago, the following graphic stands out as one of my most cherished depictions of the CEO/worker pay disparity.

Now for that conservative compensation estimate I reference above. In 2013, The Daily Kos and other media reported average CEO compensation at $12 million plus per annum. 

The image is purely horrific, and US workers nor the public are clamoring for more fair and balanced compensation considerations.

Fortunately, executives like Dan Price and Nick Hanauer are few and very far between.

Some Progressive Millionaire CEOs Embody An Idyllic America

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Gravity Payments CEO goes completely avant garde with super pay increase for some of his employees.

Building A Business With Values & Integrity

“We started our company to help our community businesses, because they deserve the same great customer service and low prices that big corporate businesses get. And we’ve grown our company by earning the trust of each and every one of our valued customers.”

Dan Price, Founder and CEO

What the heck is Gravity Payments?  As the name implies business payment systems.  

There is something gleefully progressive-like about Gravity Payments and Dan Price.

Earlier in the week MSNBC’s ALL In host, Chris Hayes, interviewed Dan Price. The interview was both an existential non-common reality and a breathe of fresh air during times of corporatist oligarchs with DNA in the John Birch Society and casino moguls directing US politics and social indifference. They promulgate the epitome of privilege and over-the-top resistance to eliminating the wage gap and pay inequality.

Hayes and Price on ALL In….

Last night I ran across another segment on the highly unusual and uncommon devotion to customers, employees and a productive (and fair) business model.

ABC depicts Gravity Payments very well and adds a great touch with personal testimony and a quick hit of Nick Hanauer, billionaire progressive with a ;message: “Pay a fair wage, get more energized and happy employees, and it all feeds customer satisfaction.”

Ceo cut salary 70k worker wage

http://abcnews.go.com/video/embed?id=30356769
ABC Breaking US News | US News Videos

No matter your social and political ideology, you must admit to difference between the two progressives depicted in the ABC segment and your conservative oligarch Koch, Adelson or any member of the Millionaires Donor Club. 

We offer a coupe of examples of conservative dark money ghosts from the 2012 election cycle. 

Exhibition I: Meet The 11 Super Rich Donors Who Are Bankrolling The GOP Race

Exhibition II: Millionaire Political Donors Club: Where Are the Women?

Price, Hanauer and the few wealthy CEO progressives are a bright light in a room of complete darkness.

Microsoft’s Nadella, Pay Equity And A Reminder Of GOP Pay Policy

Early 2009

Did someone once say “Corporations are people, my friend?” 

Did that same elitist also declare 47% of voters were of no consequence as they are bound to the Democratic Party?  Thus, declaring half of US voters of no concern to the GOP and wealthy Americans. 

Does the person who spoke the comments hold membership in a party that consistently votes against equal pay for women? 

Did that party very recently refuse to allow the Paycheck Fairness Act a US Senate vote? 

Yes, corporate America is full of elitist millionaires who have no regard for fair and equal pay. It is truly unfortunate, but there are only a few corporate CEOs and executive management teams that value progressive ideology that manifest in associated values, vision and mission.  One such billionaire is venture capitalist  Nick Hanauer and another is noted real estate mogul and financial guru Warren Buffet. The numbers are small compared to the much more common conservative who manages the nation’s mega corporations. Lest, we forget Bill and Melinda Gates  owners of Microsoft.

Did I mention Microsoft?  While the Gates’ may not appreciate categorization as a progressive corporatist, their social record away from Microsoft indicates an affinity for humane efforts to help the plight of people who have nothing and deserve a shot at an improved life (especially regarding education and life in the African Continent). I digress, but only for sake of illustration. End digression. 

This past winter (2014) Microsoft anointed this man as CEO.

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Satya Nadella

Executive

Satya Nadella is an Indian-American business executive. He is the current Chief Executive Officer of Microsoft. He was appointed as CEO on 4 February 2014, succeeding Steve Ballmer. Wikipedia

Born: 1967, Hyderabad, India

It took mere weeks for the CEO corporatist to adopt the Mark Zukerberg Tee-shirt/hoodie vesture (eg. the cool techie executive look). 

After only a few months in the top chair Nadella’s inner core came forth like a blast of flatulence at the most inopportune of moments; for the whole world to see, hear and feel. 

Huffington Post and all media are reporting on Nadella’s revealing moment.

“He had been asked to give his advice to women who are uncomfortable requesting a raise. His response: “It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along.” Not asking for raise, he added, is “good karma” that would help a boss realize that the employee could be trusted and should have more responsibility.

“Corporations are people my friend!” No the corporation is a state chartered entity that proliferates for the sole purpose of providing income to a select few while providing jobs, products or services. Its over-ridding mission according to my Masters in Business Administration professors: “To maintain its existence as an ongoing business concern.”  

Nadella’s remarks echo the reality of disparate treatment (intentional discrimination) and disparate impact (Unintentional results from policies that result in forms of discrimination) from the corporate leaders towards certain employee demographic groups. Disparate or not, we saw this week why some refuse to ignore what we call “War on Women.” Nadella may live the life of a committed liberal (I doubt that), as his remarks remind of the liberal who will fight for equal rights, but will immediately order a home for sale sign when black family moves into the home next door.

As should we should have anticipated, the Microsoft CEO quickly sought to cover his psyche with perfunctory apologizes and “comment reversing” Tweets.  How often have you heard similar from many dweebs caught speaking from their hearts with reticence of the resultant feedback? I offer Paul Ryan’s “Inner city culture” as a prime example and I offer many racist email, jokes and remarks throughout the past few years of an African-American progressive in the White House. 

Al Jazeera America (headline)
Microsoft CEO apologizes over ‘completely wrong’ women’s pay remarks

USA TODAY

Microsoft CEO Satya Nadella’s gaffe about women’s pay has not blown over yet.

http://c.brightcove.com/services/viewer/federated_f9?isSlim=1

After which Nadella issued, the ever-present and increasingly inane “walk-back.” After the perfunctory apology and issuance of “I was inarticulate,” what else is left? Social Media, of course.

1.  Satya Nadella        ✔ @satyanadella

   Was inarticulate re how women should ask for raise. Our industry must close gender pay gap so a raise is not needed because of a bias #GHC14

   3:34 PM – 9 Oct 2014

“I was inarticulate.” Didn’t Paul Ryan also use that phraseology?

I have grown to view the phraseology as: “I spoke my mind, divulge my inner thoughts, and now I have no rational words to extricate myself from my psyche.” If you prefer a more brief summary try this: “OOPS.” Commonly used to cover stupidity as with Rick Perry’s debate “oops” or to cover the inadvertent flatulence you release at the most undesirable time and place. 

The mindset is widespread and inherent to most chief executives who have reached the corporate pinnacle. A mindset that spreads down and across all corporate fissures as the “rock star” CEO is literally the corporate “god”, with all inherent deference, butt-sucking and subservience. Often the unwritten mindset outweighs compensation systems (pay and promotion) that are well meaning and architecturally developed to be fair and equitable.

Nadella’s remarks will fade into US history as having garnered an apology and worthy of moving forward. Of course, it will the very same system of privilege works against people of color, women, white men over age 40 and the physically challenged each and every day in corporate America. If those who are ultimately responsible such as Board of Directors and major Shareholders (or private owners) do not work to extinguish placement of such people in high places we as a nation will never see the death of inequality and inequity int he workplace.

The Microsoft CEO provided an irrefutable case for Affirmative-Action. If not forced via policy that requires government contractors and subcontractors to provide fair and equitable workplaces and policies, Nadella’s mindset rules and preservers.

Nadella’s remarks can only be consider as “Stay in your place and do not rock the boat.”  He should learn the hard lesson most of us learned after mere months in the trenches of corporate America: There is no “Karma” below the level of executive vice-president. 

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In September, the GOP gave a deciding “NO” to allowing the Pay check Fairness Act to come up for a vote.

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Wealth And Income Inequality

Repost via The American Pie…..
Creative Commons License, Attribution-NonCommercial-ShareAlike 3.0 Unported

American Pie: Wealth and Income Inequality in America

No matter how you slice it, when it comes to income and wealth in America the rich get most of the pie and the rest get the leftovers. The numbers are shocking. Today the top 1 percent of Americans control 43 percent of the financial wealth (see the pie chart below) while the bottom 80 percent control only 7 percent of the wealth. Incredibly, the wealthiest 400 Americans have the same combined wealth as the poorest half of Americans — over 150 million people.

According to the Center for Budget and Policy Priorities:

In 2007, the share of after-tax income going to the top 1 percent hit its highest level (17.1 percent) since 1979, while the share going to the middle one-fifth of Americans shrank to its lowest level during this period (14.1 percent).

Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth.

If all groups’ after-tax incomes had grown at the same percentage rate over the 1979-2007 period, middle-income households would have received an additional $13,042 in 2007 and families in the bottom fifth would have received an additional $6,010.

In 2007, the average household in the top 1 percent had an income of $1.3 million, up $88,800 just from the prior year; this $88,800 gain is well above the total 2007 income of the average middle-income household ($55,300).”

Slate.com collects more data in an article titled “The Great Divergence In Pictures: A Visual Guide to Income Inequality.”:

Income for the top 20 percent has increased since the 1970s while income for the bottom 80 percent declined. In the 1970s the top 1 percent received 8 percent of total income while today they receive 18 percent. During the same period income for the bottom 20 percent had decreased 30 percent.

In the 1970s the top 0.1 percent of Americans received 2 percent of total income. Today they get  8 percent.

In 1980 the average CEO made 50 time more money than the average worker while today the average CEO makes almost 300 time more than the average worker.

Over the past 30 years the rich in America have become a lot richer, while many millions of Americans have seen their income stagnate or decline. As Warren Buffett, the second richest man in America, famously said, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

Wealth and income inequality today is by far the worst in the industrialized world and has fallen in line with many Third World countries. Nobel Prize winning economist Joseph E. Stiglitz explains why this is bad news:

Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul.

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

Where Has All the Money Gone?

This may be the one of the most important graphs you will ever see. It show the reason for the decline of the American middle class — how the rich have become so much richer in the last 30 years and why the rest of us have been left behind:

In the post World War II period through the mid 1970s the productivity of the American worker increased at a steady rate. During this period workers were rewarded for their increased productivity with a commensurate increase in wages. Then something happened. Productivity continued to increase, but workers’ wages stagnated.

Trickle Up Economics

As Nobel Prize winning economist Paul Krugman points out, since 1973 national Gross Domestic Product (GDP) per household has increased 46 percent in real Inequality and Unsustainable Growth: Two Sides of the Same Coin?terms, but median income per household has only increased 15 percent. Where did the other 31 percent go? It went to the wealthy.

… the gap between economic growth and median incomes has a lot to do with rising inequality.

… it remains striking how little of growth has trickled down to the typical family.

Supply Side economics is the cornerstone of Republican economic theory and has driven U.S. economic policy since the Ronald Reagan presidency. This is how Investorpedia describes it:

Supply-side economics is better known to some as “Reaganomics“, or the “trickle-down” policy espoused by former U.S. president Ronald Reagan. He popularized the controversial idea that greater tax cuts for investors and entrepreneurs provide incentives to save and invest and produce economic benefits that trickle down into the overall economy.

In other words, if government economic policy focuses on making the rich richer, the benefits will “trickle down” to everyone else. As supply-siders are fond of saying, “A rising tide lifts all boats.” Since Supply Side economics came to dominate American economic policy during the Reagan administration, the rising economic tide has certainly lifted a lot of yachts, but at the same time it has left most of the row boats stuck in the mud.

The past quarter century of Republican economics has proven that the trickle down theory is just a convenient excuse to justify an economic policy favoring the rich, with the benefits trickling up to make the very wealthy even wealthier.

Must-See Videos on Wealth Inequality in America

Shocking Wealth Inequality

Nick Hanauer’s “Banned” TED Talk

The wealthy are not job creators.

6 Ways Extreme Income Inequality Is Making Your Life Worse

ThinkProgress, Igor Volsky

Below are the most shocking consequences of this income inequality:

1. Income inequality forces Americans into debt.

As the wealthy become wealthier, they create an “economic arms race in which the middle class has been spending beyond their means in order to keep up,” a 2013 study from the University of Chicago’s Marianne Bertrand and Adair Morse concludes.

2. Income inequality makes America sick.

Researchers at Harvard University’s School of Public Health found that women living in areas with large gaps between the “haves” and “have-nots” are at greater risk of being depressed and are nearly twice as likely to suffer from depression compared to the women living in areas that have a more equal income distribution.

3. Income inequality makes America less safe.

Statistical patterns show that crime rates increase with rising economic inequality. For instance, a 1999 Harvard analysis of the homicide rates in each state and the District of Columbia found that as the gap between the rich and the poor rose, the rate of homicide rose along with it. Income inequality alone accounted for “74 percent of the variance in murder rates and half of the aggravated assaults,” the research concluded. A 2002 World Bank study confirmed these results, concluding that homicide and an unequal distribution of resources are inextricably tied throughout the world.

4. Income inequality makes America less democratic.

A large body of research suggests that high inequality leads to lower levels of representative democracy and a higher probability of revolution, as poorer citizens become convinced that the government is only serving and representing the interests of the rich. And today’s political candidates and parties are relying more on deep pocketed campaign donors than at any other time since the early 1970s, when Congress first enacted campaign finance laws.

5. Income inequality undermines the American dream.

New research finds that while economic mobility in the United States has stayed flat for two decades, the distance between the richest Americans and the poorest has grown dramatically. So if social mobility is a ladder, this means “the rungs of the ladder have grown further apart (inequality has increased), but children’s chances of climbing from lower to higher rungs have not changed,” the researchers note.

6. Income inequality is undermining long-term economic growth.

Societies with greater income inequality experience slower and less stable economic growth, a recent global comparison from the International Monetary Fund concluded, and see far shorter economic expansions.

…