$70,000 minimum wage- says a lot about people

[EVT1]

www.foxnews.com/us/2015/04/14/seattle-boss-raises-entire-company-minimum-wage-to-70000/

I thought- well good for that company and it's employees- the CEO found a way for everyone to enjoy the success of the private company.  Reminded me of employee owned companies- like Publix.

Then I read some comments- as I should never do- but I did not anticipate the backlash- against a private company.  Now I understand why so many low paid conservative voters go into attack mode- because they are jealous- they see an increase in the minimum wage as a reduction in their own pay, and in this case they see people doing similar average jobs and making bank.  Either way they are pissed off about it- regardless that this was a free market choice- so why so serious?

     After hearing about a study that claimed income-- to a certain level-- directly affects one's emotional well-being, the founder of a Seattle-based credit card processing company announced Monday that he will take a large salary cut so he can increase the pay for each employee to at least $70,000 a year.

     The New York Times reported that Dan Price, the head of Gravity Payments, told his 120-person staff about the plan after talking to friends about the difficulties of making $40,000 a year.

     "As much as I'm a capitalist, there is nothing in the market that is making me do it," he told the paper.  Price said he will cut his nearly $1 million salary to $70,000 and use about 80 percent of the business’ anticipated profit to increase the salary of about 70 employees. About 30 employees, including the lowest-paid clerk, will see their salaries increase to the $70,000 threshold.

The horror!

Of course in the more macro sense- plenty of companies could pay a lot more, the management would still be filthy rich, the shareholders would still rake it in- and contrary to the bullshit trickle down theory- it would end up trickle up.  Ford figured it out a long time ago and for some reason it is still up for debate.

 

[Deleted]

I disagree with raising "Minimum Wage" by law to a certain figure, because it always (zero exceptions) backfires. Yes the people make more money... but they end up being able to buy LESS with it.

Instead, the law should put a cap on income disparity between levels of employment.

One simple suggestion would be the following formula:

Time of Service raises: no more than 20% per raise, per year of service.
Supervisory to a "chain of command" subordinate (excluding assistant/secretarial): Base (before Time of Service raises) of no more than 2.5x subordinate Base.
Assistant/Secretarial exception: To be paid based on a 50% multiplier of the supervisory level (example: level 8 supervisor's assistant/secretary would qualify for a 4x multiplier) of the person they Assist. their base to start at no more than 2x minimum base for lowest company employee.
Number of "supervisory levels" not to exceed 15, from lowest ranked employee to highest rank company officer. (16 total pay levels).

[haapai]

I cannot get myself to click on that link.  I've read the story elsewhere and I won't be able to keep myself from reading the comments. 

But it does set up an interesting spin-off.  How would you handle the news that over the next three years, your salary would double?  Only about a quarter of the employees were facing that scenario, but it's still mind-boggling. 

[Value Buy]

If the person owning the private company wants to turn it into a commune, more power to him

Wanna bet he will not get very much if he tries to go public with the company unless they are running a 1,000% profit margin? I guess he is not the next Facebook, or Google. IF IT HAD BECOME A SUCCESSFUL COMPANY, THEN WENT PUBLIC, HE COULD HAVE MADE THEM ALL MULTI MILLIONAIRES IF HE WANTED TO.
He owns it, so, his giving to the employees is amazing, but, I would have to see what the people above the entry level positions are making and wondering if they are now underpaid.  

[justme]

I have no animosity about it. But I also don't think this is a business model that will widely work and be effective. It'll be interesting to see how the company does over the years. Whether he'll be able to grow and attract investors with such a hit to his profitability.

[The Walk of the Penguin Mich]

Apr 15, 2015 3:41:32 GMT -5 haapai said:

I cannot get myself to click on that link.  I've read the story elsewhere and I won't be able to keep myself from reading the comments. 

But it does set up an interesting spin-off.  How would you handle the news that over the next three years, your salary would double?  Only about a quarter of the employees were facing that scenario, but it's still mind-boggling. 

So my question is.....what about the guy who is making $70K and is doing a job that requires a larger skill set and education?  He is now on par with the receptionist.  I'm not sure I'd be happy about that, knowing that I have $50K in student loans that I need to pay in order to get a job that pays on the magnitude of $70K.

My best guess is that he is going to lose his more skilled workers, at the expense of the less skilled.  The company needs both, and this could really put a crimp on the success of this move.

That being said, for the years leading up to this announcement, the CEO was making $1 million+/year.  Taking a pay cut is hardly going to have an impact on his lifestyle.

[Deleted]

So my question is.....what about the guy who is making $70K and is doing a job that requires a larger skill set and education? He is now on par with the receptionist. I'm not sure I'd be happy about that, knowing that I have $50K in student loans that I need to pay in order to get a job that pays on the magnitude of $70K.

That is so petty.

[The Walk of the Penguin Mich]

Apr 15, 2015 10:27:12 GMT -5 laterbloomer said:

So my question is.....what about the guy who is making $70K and is doing a job that requires a larger skill set and education? He is now on par with the receptionist. I'm not sure I'd be happy about that, knowing that I have $50K in student loans that I need to pay in order to get a job that pays on the magnitude of $70K.

That is so petty.

Is it?

How would you feel if you had a BS and an MS with 10 years of experience and were responsible for maintaining the company's servers, and were making the same amount of money as the receptionist out of HS?

It's not petty, it is realistic and the way people are going to think.

[Tennesseer]

Apr 15, 2015 10:40:50 GMT -5 The Walk of the Penguin Mich said:

Apr 15, 2015 10:27:12 GMT -5 laterbloomer said:

That is so petty.

Is it?

How would you feel if you had a BS and an MS with 10 years of experience and were responsible for maintaining the company's servers, and were making the same amount of money as the receptionist out of HS?

It's not petty, it is realistic and the way people are going to think.

The new $70,000 minimum salary is not happening overnight but over the next three years. Meanwhile, those making $70,000 or more today will continue to get their raises over the next three years too.

[justme]

The question is are those making 70 now going to just get normal 3 percent raises (putting them at around 6k more than the min wage) or are going to get similar raises (either percentage wise or dollar wise).

[happyhoix]

Apr 14, 2015 22:58:36 GMT -5 @richardintn said:

I disagree with raising "Minimum Wage" by law to a certain figure, because it always (zero exceptions) backfires. Yes the people make more money... but they end up being able to buy LESS with it.

Instead, the law should put a cap on income disparity between levels of employment.

One simple suggestion would be the following formula:

Time of Service raises: no more than 20% per raise, per year of service.
Supervisory to a "chain of command" subordinate (excluding assistant/secretarial): Base (before Time of Service raises) of no more than 2.5x subordinate Base.
Assistant/Secretarial exception: To be paid based on a 50% multiplier of the supervisory level (example: level 8 supervisor's assistant/secretary would qualify for a 4x multiplier) of the person they Assist. their base to start at no more than 2x minimum base for lowest company employee.
Number of "supervisory levels" not to exceed 15, from lowest ranked employee to highest rank company officer. (16 total pay levels).

You'd have to make some rule about bonuses and gifts of stock. For many execs, their actual salary pales in comparison to the money they that way. 

My company was bought a few years back and the big cheeses stopped getting stock every year. One of them was bitching to me that he had been setting that aside for college money for his kids, and now he was going to have to set aside part of his salary, instead.

Felt like saying 'welcome to the club, asshole' but he was a lot higher on the corporate org ladder than me.

[Tennesseer]

Apr 15, 2015 11:53:44 GMT -5 justme said:

The question is are those making 70 now going to just get normal 3 percent raises (putting them at around 6k more than the min wage) or are going to get similar raises (either percentage wise or dollar wise).

I don't know. I looked to see if there was any mention of those currently making 70k or more today, and if their pay would be adjusted up over the next three years too in addition to a normal merit increase, but found nothing. I cannot imagine this CEO is going to allow someone doubling their salary over the next three years to 70k while only offering a 9% merit increase (for example) spread out over the next three years to someone making 70k or more now. Maybe more news will come out about that after everything settles down.

Would the CEO be foolish enough to earn the disloyalty of the 50 employees who will not be affected by the minimum yearly salary increase. He does not seem to be that type of CEO.

[Deleted]

Apr 14, 2015 22:27:24 GMT -5 EVT1 said:

www.foxnews.com/us/2015/04/14/seattle-boss-raises-entire-company-minimum-wage-to-70000/

I thought- well good for that company and it's employees- the CEO found a way for everyone to enjoy the success of the private company.  Reminded me of employee owned companies- like Publix.

Then I read some comments- as I should never do- but I did not anticipate the backlash- against a private company.  Now I understand why so many low paid conservative voters go into attack mode- because they are jealous- they see an increase in the minimum wage as a reduction in their own pay, and in this case they see people doing similar average jobs and making bank.  Either way they are pissed off about it- regardless that this was a free market choice- so why so serious?

     After hearing about a study that claimed income-- to a certain level-- directly affects one's emotional well-being, the founder of a Seattle-based credit card processing company announced Monday that he will take a large salary cut so he can increase the pay for each employee to at least $70,000 a year.

     The New York Times reported that Dan Price, the head of Gravity Payments, told his 120-person staff about the plan after talking to friends about the difficulties of making $40,000 a year.

     "As much as I'm a capitalist, there is nothing in the market that is making me do it," he told the paper.  Price said he will cut his nearly $1 million salary to $70,000 and use about 80 percent of the business’ anticipated profit to increase the salary of about 70 employees. About 30 employees, including the lowest-paid clerk, will see their salaries increase to the $70,000 threshold.

The horror!

Of course in the more macro sense- plenty of companies could pay a lot more, the management would still be filthy rich, the shareholders would still rake it in- and contrary to the bullshit trickle down theory- it would end up trickle up.  Ford figured it out a long time ago and for some reason it is still up for debate.

 

I loved the trickle down. I never over paid the going rate for any position. Of course when I was in business, the entitlement/handout mentality didn't really exist all that much. I took all the risk. I accepted all the reward for a profitable operation.

[EVT1]

Interesting read about Publix- although they don't have a 70K wage they still are doing it right- I like the model.

www.forbes.com/sites/briansolomon/2013/07/24/the-wal-mart-slayer-how-publixs-people-first-culture-is-winning-the-grocer-war/

      "I’m always amazed that more companies don’t recognize the power of associate ownership,” says Publix CEO Ed Crenshaw, 62, the grandson of founder George Jenkins and the fourth family member to run the company. While Crenshaw has a 1.1% stake in Publix, worth $230 million, and his entire family has 20%, worth $4.2 billion, the employees (and former employees) are the controlling shareholders, with an 80% stake, worth $16.6 billion. Not surprisingly none of them belongs to a union.

    

      he has faith in his employees and his complex compensation system that, in addition to ubiquitous ownership, grants shares of a store-specific bonus pool every 13 weeks. The exact amount varies, but typically 20% of quarterly profits go into that larger pool; 20% of the pool is then paid out in cash to the store’s employees. “When competition opens up across the street and our sales are impacted, they’re impacted,” he says. “So they’re incented to make sure they’re doing everything they can to serve that customer to the best of their ability.”

      Based on recent results–sales were up 6% in the last quarter and net earnings rose 15%–that people-first formula Publix inherited from George Jenkins is working. Not that Crenshaw is surprised. “Too many companies are subjected to the stock market and analyst calls, and it’s all about what we can do to make sure this quarter we’re projecting this and meeting this,” he says. “We’re in this business for the long haul–83 years so far.”

[Deleted]

Apr 15, 2015 11:59:07 GMT -5 happyhoix said:

Apr 14, 2015 22:58:36 GMT -5 @richardintn said:

I disagree with raising "Minimum Wage" by law to a certain figure, because it always (zero exceptions) backfires. Yes the people make more money... but they end up being able to buy LESS with it.

Instead, the law should put a cap on income disparity between levels of employment.

One simple suggestion would be the following formula:

Time of Service raises: no more than 20% per raise, per year of service.
Supervisory to a "chain of command" subordinate (excluding assistant/secretarial): Base (before Time of Service raises) of no more than 2.5x subordinate Base.
Assistant/Secretarial exception: To be paid based on a 50% multiplier of the supervisory level (example: level 8 supervisor's assistant/secretary would qualify for a 4x multiplier) of the person they Assist. their base to start at no more than 2x minimum base for lowest company employee.
Number of "supervisory levels" not to exceed 15, from lowest ranked employee to highest rank company officer. (16 total pay levels).

You'd have to make some rule about bonuses and gifts of stock. For many execs, their actual salary pales in comparison to the money they that way. 

My company was bought a few years back and the big cheeses stopped getting stock every year. One of them was bitching to me that he had been setting that aside for college money for his kids, and now he was going to have to set aside part of his salary, instead.

Felt like saying 'welcome to the club, asshole' but he was a lot higher on the corporate org ladder than me.

The "rule" is already "in there" (by it's very absence)... there are no bonuses or "gifts" of stock, if they would exceed the cap (ETA: or the rank-and-file employees are also eligible at their base levels).

If the CEO wants to make more... all he/she has to do is pay the lowest employees more, and then the increases go up the chain from there. This formula doesn't limit the income of the CEO... it only limits the disparity between employee rank.

[jkapp]

I found it an interesting story, but I'd like to see him try it with a large company with thousands of employees sometime...

But, if his employees are earning minimum wage now, that means he is paying them the bare minimum, and has for who knows how many years.  So the liberals will jump at this story to show how a businessman is paying such a large wage to his lowest-skilled workers, yet they would have been berating him for the past several years for not paying a "livable wage." 

I'd like to see all of the proponents of this guy's idea to start a business and pay a minimum of $70k to their employees...you'll get some great workers for sure - and you'll be out of business in three months (maybe less).

[djAdvocate]

Apr 16, 2015 21:35:46 GMT -5 jkapp said:

I found it an interesting story, but I'd like to see him try it with a large company with thousands of employees sometime...

But, if his employees are earning minimum wage now, that means he is paying them the bare minimum, and has for who knows how many years.  So the liberals will jump at this story to show how a businessman is paying such a large wage to his lowest-skilled workers, yet they would have been berating him for the past several years for not paying a "livable wage." 

I'd like to see all of the proponents of this guy's idea to start a business and pay a minimum of $70k to their employees...you'll get some great workers for sure - and you'll be out of business in three months (maybe less).

what if i were to tell you that there are 15 large corporations that average over $120k/employee?

how would you react to that fact?

[TheHaitian]

Apr 17, 2015 1:45:12 GMT -5 djAdvocate said:

Apr 16, 2015 21:35:46 GMT -5 jkapp said:

I found it an interesting story, but I'd like to see him try it with a large company with thousands of employees sometime...

But, if his employees are earning minimum wage now, that means he is paying them the bare minimum, and has for who knows how many years.  So the liberals will jump at this story to show how a businessman is paying such a large wage to his lowest-skilled workers, yet they would have been berating him for the past several years for not paying a "livable wage." 

I'd like to see all of the proponents of this guy's idea to start a business and pay a minimum of $70k to their employees...you'll get some great workers for sure - and you'll be out of business in three months (maybe less).

what if i were to tell you that there are 15 large corporations that average over $120k/employee?

how would you react to that fact?

I don't want average, sorry but you're high earners (think Google, high tech were right out college kids are making six figures) will skew that average.

Find me a company where the receptionist, the file clerk, the mail delivery kid, the assistants , the maintenance crew (every single
One), the cleaning crew, (every single one) , security guy are making over $70,000.

He raised the "minimum" salary that he would pay any of his employees. So for it to be a fair comparison you need to find a corporation where every single employee is making more than $70,000/year.

[fairlycrazy23]

I think it would have worked out better if instead of raising base salaries to 70k. He implemented profit sharing where the expected results would have been raising compensation to 70k. But that would still be 'stressful' and I think one of his stated goals was to remove financial stress from his employees.

[zibazinski]

DH hasn't given raises in years. He pays out bonuses based on company profitability. There were two employees that brought no profit to the company. One retired, the other I fired. Everyone has a vested interest in making the company profitable because they share in the profits. Big time! Key guy got a 60k bonus last year! He doesn't make chump change to begin with either.

[EVT1]

I don't think anyone is suggesting 70K. But a livable wage is easily doable- you would think that since so many people are against welfare they would back such a minimum wage as to ensure any full time worker makes enough to not qualify.

[djAdvocate]

Apr 17, 2015 5:54:42 GMT -5 TheHaitian said:

Apr 17, 2015 1:45:12 GMT -5 djAdvocate said:

what if i were to tell you that there are 15 large corporations that average over $120k/employee?

how would you react to that fact?

I don't want average, sorry but you're high earners (think Google, high tech were right out college kids are making six figures) will skew that average.

Find me a company where the receptionist, the file clerk, the mail delivery kid, the assistants , the maintenance crew (every single
One), the cleaning crew, (every single one) , security guy are making over $70,000.

He raised the "minimum" salary that he would pay any of his employees. So for it to be a fair comparison you need to find a corporation where every single employee is making more than $70,000/year.

Barclay's average STARTING SALARY is $78k.  they have over 100,000 employes- which is a bit more than 100.
Apogee Medical pays every employee over $100k.  but they only have 750 employees.  still more than 100.

[djAdvocate]

i am sure you could find hundreds of medium sized employers paying above $70k/employee.  but that was the low hanging fruit.

[Robert not Bobby]

It is all a matter of context.

A "living wage" will vary greatly depending on where you are living...Manhattan, San Fransisco or Waco Texas or some small town in Nebraska?

And what exactly does a "living wage" mean? Perhaps meeting your basic needs, rather than wants? I think no cell phones and TV's the size of a small movie screen, are allowed. But do we need that?

Food, clothing, shelter and adequate medical coverage come to mind...and of course a loving family and good friends.

[EVT1]

I would think a formula could be devised- it isn't like paying more for HCOL areas is anything new.

But I agree it would be a no frills basic needs level- and high enough to avoid welfare for a single person.

If we decide that it is the best interest of society to help out with the children- single moms and dads- then that is a different.  That is a choice on where to spend our tax dollars- just like the mortgage interest deduction is- especially for second homes.  Never seem to hear any complaints about that one  from the people that constantly berate the poor for their special tax treatment

You have to admit though, when the largest employer in the country creates pamphlets on how to sign up for government benefits it is hard to not view them as a pay subsidy.

[EVT1]

Well Rush the genius chimed in on it- apparently a private company in a free market that sets their own wage structure in a way he disagrees with is Socialism   With a Solyndra reference to boot.

www.rushlimbaugh.com/daily/2015/04/15/ceo_buys_short_term_love

     This is pure, unadulterated socialism, which has never worked. That's why I hope this company is a case study in MBA programs on how socialism does not work, because it's gonna fail. My guess is that just like when Solyndra went south, there will not be a story on Gravity Payments succumbing to gravity and going under.

That's right folks- a private owner with a private company is guilty of pure unadulterated Socialism

And he hopes it fails- that sounds familiar. 

[djAdvocate]

Apr 17, 2015 15:52:18 GMT -5 Robert not Bobby said:

It is all a matter of context.

A "living wage" will vary greatly depending on where you are living...Manhattan, San Fransisco or Waco Texas or some small town in Nebraska?

And what exactly does a "living wage" mean? Perhaps meeting your basic needs, rather than wants? I think no cell phones and TV's the size of a small movie screen, are allowed. But do we need that?

Food, clothing, shelter and adequate medical coverage come to mind...and of course a loving family and good friends.

there is an actual working definition of living wage, but it is a relatively new term:

A living wage is defined as the wage that can meet the basic needs to maintain a safe, decent standard of living within the community.[2] The particular amount that must be earned per hour to meet these needs varies depending on location. In the 1990s the first living wage campaigns were launched by community initiatives in the US addressing increasing poverty faced by workers and their families. They argued that employee, employer, and the community win with a living wage. Employees would be more willing to work, helping the employer reduce worker turnover, and it would help the community when the citizens have enough to have a decent life.[3]

you can follow the footnotes in Wikipedia.

my reading of Living Wage is that it is what Minimum Wage SHOULD be- if it actually did what it was designed to do.

[djAdvocate]

Apr 20, 2015 22:48:15 GMT -5 EVT1 said:

Well Rush the genius chimed in on it- apparently a private company in a free market that sets their own wage structure in a way he disagrees with is Socialism   With a Solyndra reference to boot.

www.rushlimbaugh.com/daily/2015/04/15/ceo_buys_short_term_love

     This is pure, unadulterated socialism, which has never worked. That's why I hope this company is a case study in MBA programs on how socialism does not work, because it's gonna fail. My guess is that just like when Solyndra went south, there will not be a story on Gravity Payments succumbing to gravity and going under.

That's right folks- a private owner with a private company is guilty of pure unadulterated Socialism

And he hopes it fails- that sounds familiar. 

he's utterly wrong on the facts, to boot.  Barclays has a better pay structure than this company.

[justme]

Apr 21, 2015 10:33:32 GMT -5 djAdvocate said:

Apr 17, 2015 15:52:18 GMT -5 Robert not Bobby said:

It is all a matter of context.

A "living wage" will vary greatly depending on where you are living...Manhattan, San Fransisco or Waco Texas or some small town in Nebraska?

And what exactly does a "living wage" mean? Perhaps meeting your basic needs, rather than wants? I think no cell phones and TV's the size of a small movie screen, are allowed. But do we need that?

Food, clothing, shelter and adequate medical coverage come to mind...and of course a loving family and good friends.

there is an actual working definition of living wage, but it is a relatively new term:

A living wage is defined as the wage that can meet the basic needs to maintain a safe, decent standard of living within the community.[2] The particular amount that must be earned per hour to meet these needs varies depending on location. In the 1990s the first living wage campaigns were launched by community initiatives in the US addressing increasing poverty faced by workers and their families. They argued that employee, employer, and the community win with a living wage. Employees would be more willing to work, helping the employer reduce worker turnover, and it would help the community when the citizens have enough to have a decent life.[3]

you can follow the footnotes in Wikipedia.

my reading of Living Wage is that it is what Minimum Wage SHOULD be- if it actually did what it was designed to do.

The main thing I've never seen clarified is whether the living wage should support one person or four. Well I suppose I have to some extent, often hearing someone can support a family of four on minimum wage so they need a living wage.

[The Captain]

Apr 17, 2015 18:43:51 GMT -5 EVT1 said:

I would think a formula could be devised- it isn't like paying more for HCOL areas is anything new.

But I agree it would be a no frills basic needs level- and high enough to avoid welfare for a single person.

If we decide that it is the best interest of society to help out with the children- single moms and dads- then that is a different.  That is a choice on where to spend our tax dollars- just like the mortgage interest deduction is- especially for second homes.  Never seem to hear any complaints about that one  from the people that constantly berate the poor for their special tax treatment

You have to admit though, when the largest employer in the country creates pamphlets on how to sign up for government benefits it is hard to not view them as a pay subsidy.

Just so I'm clear - are you proposing a formula to determine the minimum wage an employer can pay based on an individuals personal situation as opposed to their skill set?

So you hire two cashiers - one is a single male with no dependents.  The other is a single mom with three kids, one of whom is special needs.

What exactly do you think is going to happen in this situation?  Yep - the single mom won't be hired or won't last long.  Just being honest here.

Finally - I've said several times I'm more than willing to give up my mortgage interest deduction (I'm pretty close to the standard deduction anyway) if we have true income tax reform so yea - there are those that comment on that.

I'm much more in favor of a limited timeline for social benefits which include a training program.  I'd love to know how Germany manages things (and I don't - but they have low unemployment and their fiscal situation is better than ours). I also believe the government should be the employer of last resort - hell we have enough social and infrastructure work that needs help.

We do a very poor job in the country of matching resources with needs.