It seemed like Dan Price had it all. He was the CEO of a successful business with a million-dollar salary and a gorgeous home overlooking Puget Sound outside Seattle, Washington. But then he noticed two things: first, more money wasn’t making him any happier. “There’s some number where, when you hit it, the money over that just doesn’t make your life much better.” And secondly, his employees were struggling. Cost-of-living in Seattle is one of the highest in the nation. So, Dan did something unthinkable: in 2015, he cut his million-dollar salary down 90% in order to raise the minimum wage of his workers to $70,000.
The effect was immediate: More than 10% of employees have purchased a house for the first time. Personal individual 401k contributions have more than doubled, and more than 70% of employees with debt have been able to pay some of it down. Other surprising things happened as well: The number of babies born to employees in the company increased from 0-1 per year to roughly 6-7 per year. “The worries of not being able to pay for something have disappeared,” wrote one employee when asked how Gravity’s wage policy has affected their life. “I don’t have to make a choice between fuel or groceries. I don’t have to worry about an unexpected emergency.”
And what happened to his company? It grew from 120 employees to more than 200. They even opened a second location in Boise, Idaho and instituting the same minimum wage there as well.
Dan said, “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. But my life is so much better.”
