Monday Buzz: The $70K Minimum Wage, Six Months Later
If the past six months of results are any indication, the company that set a $70,000 minimum wage may have made the right business decision. Plus: Do nine out of 10 nonprofits really fail?
Gravity Payments founder Dan Price decided in April to raise his company’s minimum salary far beyond Seattle’s $15 hourly wage: to $70,000 a year. That decision sparked a huge debate about whether the move would propel the credit-card-processing company to the next level or if it would drag the business down with unsustainably high salary obligations.
Six months into the experiment, how is Gravity faring? Inc. editor Paul Keegan talked with Price to find out, and his findings, though still early, indicate that the pay bump has more than paid off for the company.
“Revenue is growing at double the previous rate. Profits have also doubled,” Keegan writes. “Gravity did lose a few customers: Some objected to what seemed like a political statement that put pressure on them to raise their own wages; others feared price hikes or service cutbacks. But media reports suggesting that panicked customers were fleeing have proved false. In fact, Gravity’s customer retention rate rose from 91 to 95 percent in the second quarter.”
The company’s biggest immediate challenge, Keegan discovered, could be a legal battle between Price and his brother over ownership of the company, a battle that Keegan explores in depth here.
Litigation aside, Price’s bold decision appears to be a financial victory—though, ultimately, he wants the $70,000 wage to be recognized as something other than a savvy business deal.
“I want the scorecard we have as business leaders to be not about money but about purpose, impact, and service,” he told Keegan. “I want those to be the things that we judge ourselves on.”
Reality Check of the Day
Are infographics dead? Critics may claim that their usefulness has vanished as the web continues to evolve, but in this post on Hootsuite’s blog, writer Dara Fontein relates how you can keep your infographics relevant by focusing on data, by designing these tidbits so they’re easy to share on social media, and by creating clear, uncluttered visuals.
Other Good Reads
Business is about creating beneficial partnerships, but how do you know if you’re getting the most out of yours? National Retail Federation senior vice president Mike Gatti shares some tips with Entrepreneur on optimizing business-association relationships.
Advertising can be an expensive venture for nonprofits, but this coalition of agencies is changing that, one free ad at a time.
Presidential hopeful Ben Carson claimed that nine out of 10 nonprofits fail, but do the numbers support that assertion? The Washington Post dives into the facts to see just how effective nonprofits really are.