It is certainly nothing new, but the economic disparity between the salaries of company owners or even high-ranking chief officers and those that work below them has stretched to an unacceptable width. As CEOs of many companies continue to rake in hundreds of thousands, if not millions of dollars per year, their employees on the front lines struggle to allocate their meager paychecks across all of life’s unavoidable expenses. If you’ve ever heard the saying “you get what you pay for,” you know it applies to many aspects of life. For the same reason there are probably certain items you shouldn’t purchase at a dollar store if you’re expecting supreme quality, employers who want the best talent and hardest workers to join their ranks need to offer a compensation package that is commensurate with that desire. Low pay, erratic and inflexible hours and scheduling, punitive recourse as opposed to constructive team-building, as well as lack of benefits and paid time off have become a depressing norm in many large corporations. It is no small wonder that the retail industry, which is notorious for the aforementioned practices, suffers such an explosively high employee turnover rate. Interviewers always grill potential candidates about what they will bring to the table for the company, but get immediately turned off when the interviewee asks what’s in it for them. When did it become this way? When did it become too much to ask for workers to be fairly compensated for their toils, so as to survive a bit more comfortably in a world that attacks them from all sides with rising food and gas prices, high taxes, and skyrocketing housing expenses? Many argue that it all comes down to skill, but such skill is hard to obtain when fewer companies are willing to train new hires and expect unrealistic amounts of experience to even be considered for a position. It is time for all of this to change. It is time for all companies, large and small to start doing something to breed loyalty and inspire motivation in their employees.
Dan Price, the CEO of Gravity Payments, a Seattle-based credit card processing company, reached this important epiphany and decided to act. He sent shockwaves through the bones of his employees, as well as through the news wires, when he announced to them that in a program that would be rolled out over the next three years, all of their salaries would be raised to at least $70,000 a year. To make this generous promise a reality, according to Patricia Cohen of the New York Times this past week, Price would cut deeper into the company’s comfortable profit margins and into his own more than comfortable million-dollar salary, bringing his paycheck down to their level. Emotions erupted in the comment thread for Cohen’s article on the Web, with that outpouring seemingly divided between praise and derision. Many celebrated Price’s decision, calling for more companies to follow suit. Others laughed it off as a publicity stunt that will never actually come to fruition, and still others insist that he is in over his head and will put the company out of business within a year. It is difficult to know what all of these commentators do for a living, but for better or worse, what Price is doing struck a major chord in them. While this exciting proposition raises a valid concern that such high salaries would be difficult to maintain if the company were to hit a decline in sales due to fierce competition or another national economic depression, Price did not promise those raises to be effective immediately, and you simply don’t get to be the chief executive officer of a company without considerable intelligence, foresight, and business acumen. Another point to keep in mind is that this is no handout. The people under Price’s employ still need to come to work every day, work hard, and do their jobs well. The more obnoxious detractors scoffed at his generosity, touting their own “skills” and advanced educational degrees, becoming incensed at the prospect of a clerk or mailroom worker making as much money as them. The audacity it takes for those armchair commentators to call another human being unworthy of a fair shake in the workplace, simply because they couldn’t afford several hundred thousand dollars-worth of college degrees is deeply upsetting. By default, the lack of “Dr.” in front of a person’s name, or an “MBA” succeeding it makes them no less intelligent, and no less a respectable worker than anyone else.
In an interview with Farnoosh Torabi of Money Magazine, Price explained his decision, which he based on a Princeton study that equates a certain yearly salary with increased happiness, aims to improve morale on two fronts. “First and foremost,” he told Torabi, “will be our client satisfaction.” He went on to state that while money is not the most important thing that he provides to his team, having his employees live paycheck-to-paycheck is a “distraction”, the removal of which “will significantly improve our ability to take care of our clients.” In a follow-up article, Cohen of The New York Times noted Price’s response to his naysayers, himself insisting that he is still a capitalist, and assuring that his plan will not only benefit his company in the long run, but will bring out into the open the portrait of greed that has been painted in broad strokes across the American economic canvas. “It’s crazy,” Price said in reference to the notion that he should set his pay as a company executive according to market trends. It is clear to Price, as it should be to others in his position, that the main concerns of a company leader should be the happiness of his or her employees and customers, rather than the dictations of a fluid and ever-changing market that has no actual authority.
The current employment system in this country is thoroughly damaged, and it is time for it to start being fixed, from the top down. It is time for employers to give their teams a reason to perform their jobs with renewed passion and vigor, and to simply make them feel appreciated for all that they do. It is time for companies that end each year with multi-billion dollar profit margins to stop acting like they don’t have the money to pay their employees better. It is time for honest, hard workers to worry less about their next mortgage payment, about a sudden car repair, or even about affording a much-needed vacation with their families. While Price’s decision is a dramatic one, and larger national companies shouldn’t necessarily have to double the salaries of every single employee in one fell swoop, they can still follow in his footsteps and do better. The reality is that someone making just above minimum wage, spending nights, weekends and holidays away from their families, being given a shoddy benefit package and a threadbare vacation schedule that is rife with blackout dates will likely never put their heart and soul into what they are doing, and it is far from reasonable to expect them to. A leader that takes care of their followers will give birth to fertile grounds, which in short order will yield loyalty, passion, and forgive the corporate buzzwords here, a sense of urgency. It only takes one victory to turn the tide, and it is good to see that someone is finally leading the charge.