I used to work at Gravity. Dan (owner of Gravity) is sincere and frankly the real deal.
Dan Price really is like what is presented in this article. He actually cares about his employees and is being genuine here. He's a good person, making a private business decision to increase the pay of frankly his lowest paid workers.
In a city where the average tech worker earns $275k a year, he believes its the right thing to do to make sure everyone that works for him at Gravity can earn enough to afford rent, food, and some fun.
Say what you will about the merits of decision, but it takes real leadership to make it and stand by it. I happen to think he's doing the right thing and I hope other companies choose to follow suit.
Saw a video of Price saying that his minimum salary may have indirectly raised housing costs in his city and that is not a problem he can solve but something that the city must. I don't know the figures but I would guess that any effect that he had caused was minimal.
He really does come across as great guy. If I was more local I would probably look to work for him.
Genuinely curious, not judgemental here. How did the usually-much-better-paid people feel about this? Did they complain that their salaries were now closer to the lesser paid people?
Like, I could see somebody not feeling like that's fair so I'm wondering how the morale was impacted by that.
There is a lot of good intentions here but we did run a very large scale experiment for 69 years on about 300M people. It was called the Soviet Union and the results weren't pretty economically for the people. So the concern remains how long this can last, how brittle is this and how much can it scale.
Just to clarify - the article mentions that he put everyone in the company on a minimum salary of $70K. I would think that high level technical staff on $100K+ would have been more than a little upset to have their salary slashed. Junior staff members are the winners here!
I can't find any mention of technical staff having their salary slashed. The only mention of pay cuts is the one the CEO took. Would you mind sharing a source where this is stated?
> "When money is not at the forefront of your mind when you're doing your job, it allows you to be more passionate about what motivates you," she says.
I spent the first several years of my career working in academia for a poverty level wage.
I can confirm from my own experience that when you worry about not being able to pay rent and all the bills, it's very difficult to be productive, much less in a job that requires any kind of focus or creative thinking.
I live in Berlin, which has a history of being both poor and having an extremely creative subculture.
It's interesting but sad watching that creativity vanish as the rents rise. There's more money here now, but less creativity.
I think this apparent contradiction is resolved by asking "who had the time to be creative?". When rents were low, artists could make ends meet and still have time to create. As rents are rising, the artists are pushed out, or forced to spend more time making money. The new tenants are people earning decent money, who again are either working too hard to create, or are not "artistic" in that sense (me included).
The old squats and communal housing are being redeveloped, the graffiti-covered walls are being repainted so the houses they cover keep their value. The focus moves from "poor but sexy" to "let's make lots of money". Everyone is richer, except the culture.
“Intellectual freedom depends upon material things. (...) Women have had less intellectual freedom than the sons of Athenian slaves. Women, then, have not had a dog's chance of writing poetry. That is why I have laid so much stress on money and a room of one's own”
South Africa has this problem in academia and to a order of magnitude worse.
Not only do you worry about your own small income; but grants, scholarships, registration fees and a myriad of other things have in recent times become volatile and can be taken away from year to year.
Most of the issues is due to 1) our government being corrupt and 2) promises the government made about free education.
I am not against free education, but I am against impoverished professors.
This is why I decided to side-step academia. It is delaying my PhD by probably 3–7 years (I am at year 2's start now) but it's better than having in theory 100% time spent on a PhD but actually worrying about the University and your peers, your own future, etc. in reality.
That is a consequence of procrastination, which is the consequence of anxiety, which is the consequence of barely meeting ends.
Basically in order to be productive under those circumstances you have to ignore reality, which can be problematic for the people around you.
But at the same time everything is relative on your perception of reality. We spend today 50-100 times more energy per person that people 100 years ago, and most of those people were happy.
We upgraded our expectations, specially because of mass media and advertisements and feel always dissatisfied because they will compare us with people that have more than we have.
I worked sub-minimum wage for a decade or so; I don't think poverty is an impediment to creativity. It is an impediment to using that creativity (particularly to generate value and/or income), however.
Not disagreeing, just trying to add some complexion.
water / food / electricity doesn't total high for my needs, rent on the other hand
I guess that's why artists lives in old buildings sometimes..
ps: also, call me crazy, but I think in a hunter settings you'd have more time to wander and create than todays city life. As long as there's enough rabbits around to grab ..
> I can confirm from my own experience that when you worry about not being able to pay rent and all the bills, it's very difficult to be productive, much less in a job that requires any kind of focus or creative thinking.
Who was paying you and could you not go do something else for money?
On the other hand, having money makes me less productive, since I spend more time caring about the stock market. Like yesterday alone my long ETF lost 2000€ worth, and I bought a short ETF for balance, which went up 200€. Should have bought the short ETF earlier, but I was at work. Here I am actually losing money by going to work
I think it's important to mention some other sides of this story, namely that the raise came right around the time his brother filed a lawsuit for him overpaying himself and domestic abuse allegations. I don't remember the articles exactly but there were some rumors that this change was a PR stunt and shield for him
“Gravity’s 2014 profit was $2.2 million, Price adds. At private companies with sales like Gravity’s total revenue, salary and bonus for the top quartile of CEOs is $710,000, according to Chief Executive magazine’s annual compensation survey. At companies with sales like Gravity’s net revenue, the top quartile pay falls to about $373,000. At companies with a similar number of employees as Gravity, the top quartile of CEOs makes $470,000 in salary and bonus. The CEO of JetPay, a publicly traded competitor that processes a similar volume as Gravity, received $355,000 in 2014.“
Yet his comp was $1.1MM?
“Price signed with the talent agency William Morris Endeavor Entertainment and now charges as much as $20,000 per speech, Pirkle says.”
Or his obvious avoidance to answering the direct questions. It’s cool what he did, but I don’t trust the guy. Or at least I doubt his motives are so honorable. Perhaps I’m too cynical.
Btw, I think Google could already either pay 70k+ to every employee or is pretty close. They just need to make sure that all the janitors and baristas are employed by subcontractors.
I wonder how long it will take for the salaries to normalise comparing with market rate.
The salaries increased to 70k minimum, so they’re paying above market rate for a few roles.
The hiring quality will also increased. For example, with a 40k salary, the company could hire someone with 5 years of experience, with 70k, they can find someone with 10 years of experience.
So in a few years the company will get rid of low performance and hired more skilled workers and the salary vs skill will match the market rate again. (with a few exceptions)
>I wonder how long it will take for the salaries to normalise comparing with market rate.
When they stop growing and increased competition will cut into their margins, and especially if they start losing money. At that point, they'll be looking at efficiencies everywhere - and those expensive employees will probably be laid off.
> Two senior Gravity employees also resigned in protest. They weren't happy that the salaries of junior staff had jumped overnight, and argued that it would make them lazy, and the company uncompetitive.
There have been several CEOS who historically have paid themselves 1usd or very low salaries. They end up making up the difference in other parts of their comp packages. I suppose this boss is also the main shareholder so he benefits from productivity increase.
While I admittedly do not know any of the inside details, but if you read up on some of the "Glass Door" reviews on Gravity Payments, you'll see a trend of reviews commenting on the cult-like behaviour of the company. I'd suggest doing your own research on companies you apply to before you get mesmerized by their media publicity.
Indeed. There are roughly three ways to convince people to keep the discipline needed for the collaborative work: force them, interest them economically, or have them believing the cause. Slavery, capitalism, and monastery.
Real systems usually are mixes. E.g. Soviet system is largely slavery plus some bits of capitalism and a lot of propaganda to cover the monastery aspect. Or a capitalist company with a visionary leader may be quite a monastery too.
Now, the most pleasant way to work is indeed a monastery, but the one that scales well is capitalism :) Slavery is inferior on both counts, but may work when there's no way to add economic interest.
Since it's working for Dan and his company, great!
> in Seattle that wasn't enough to afford a decent home.
Because the population in Seattle has grown by leaps and bounds, if everyone could afford one of the supply of homes, the prices would go up until demand equals supply.
Alternatively, we could push to make housing not a commodity. Build more public housing, upzone and regulate what gets rebuilt to ensure more units, put laws in place to advantage renters, make building affordable units a higher roi than building luxury units, etc.
I’m very impressed by the generosity of this business owner- I don’t know if I would have that kind of moral compass in his position.
However- it still needs to be said that we really ought to fight to create an economic system in which everyone has the means to have a comfortable life, even if individuals that make it up are not virtuous. Because this kind of story is a rarity, and the market will certainly punish him for his generosity.
> in which everyone has the means to have a comfortable life,
Why do you think everyone should have the means to have a "comfortable" life? Perhaps you mean means to meet necessities? If not, what does "comfortable" mean to you? Additionally, why do you think that the means are not there today?
It seems like a good initiative, but two thoughts immediately come to my mind:
1) Him making $1million salary at a small-medium company is quite a bit, but that may be because ...
2) ... the company is clearly making a lot of money (as in a lot of profit) and/or growing quickly. When you're growing and making huge profits at a software company, you can afford to pay above the market rate because you have spare cash. At some point that will change. The growth rate will plateau and they will cut salaries (maybe not for existing employees, but for new hires), or layoff expensive staff.
But props to Dan to get this done when he had the chance to.
As far as I know, there was an Argentine tango orchestra (one of five great tango orchestras) led by Osvaldo Pugliese that used a similar approach. Pugliese was indeed a communist, a member of Communist Party of Argentina, I believe, and in his orchestra they divided all the earnings equally among members. Was one of the most stable tango collectives.
"His company, Gravity Payments, which he set up in his teens"... I'd LOVE to see how a TEENAGER was able to go through the PCI-DSS certification process and PASS the D-level.
Note that this story has been told and retold for years. Whatever difference in pay he paid has more than paid for itself in press attention and marketing.
Oh, that story. I remember it. A lot of the high-performers left shortly after that. It was all triggered by some lawsuit in the first place anyway. The "give everyone the same salary" was like a compromise to weaken the lawsuit while at the same time to make a positive impact on media.
Alfred Nobel started the prize because his obituary was accidentally published, putting him in a bad light and he wanted to be remembered differently - we benefit from this prize today, in spite of his destructive business activities. I think it's fair to mention the fact that it was due to Price being accused of overpaying himself that the situation got turned around to be something valuable for his company and staff. However, I don't think it's fair to vilify him in the present day and discredit the results.
> A lot of the high-performers left shortly after that
The article specified that "two senior Gravity employees also resigned in protest". Do you have a source for "a lot of the high performers" outside of those two?
It sounds to me like it worked out for the company, regardless of the CEO's personal goings-on. It's a win for the idea that if you pay all your employees reasonably, they won't just fall back and let the company crumble. I think it's really important to point and show that this initiative, which so many people derided as ridiculous and guaranteed to fail, actually worked.
But is it actually interesting why this started? As a purely economic experiment it's surely at least not a total failure as the company is still standing.
I'm not sure what value the "high performer" qualification has in this instance. They were the highest paid, but I don't think we have any guarantees to their actual output. If the CEO is an untrustworthy agent (as some of the stories make him out to be) how can we trust any of the valuations of his employees?
Yeah, I'm really surprised more people aren't bringing up the lawsuit aspect of it (and the accusations of domestic abuse) while saying he's a 'nice guy.'
> Lucas Price served the suit on his brother prior to the $70,000 announcement, and the core allegations related to the preceding years. The suit alleged that Dan Price used his majority control of the company to pay himself excessive compensation, manipulate valuations of the company to his financial benefit, and charge hundreds of thousands of dollars in personal expenses to the company.
FWIW, Dan Price (owner of Gravity) is the real deal.
While I no longer work there, I am proud of what he is doing. He is a capitalist, making a decision as a private business owner to help improve the lives of his employees earning < $70k (in the expensive Seattle area mind you) by reducing his own compensation.
Nothing wrong with that-as long as it’s really free. It’s the paid article that’s wrong.
Journalism shouldn’t give coverage intended to benefit a company. But it’s just as important they don’t forgo telling a story they consider interesting just because it might incidentally benefit the subject.
Anyone who was worked a job where low wages are paid (either as a worker receiving low wages or in a managerial position) knows that there is an extremely tangible effect on work quality and productivity.
Workers who feel they aren't being fairly compensated for their labor don't work as hard. They don't show as much attention to detail. They don't have any loyalty to their employers, who they perceive as exploiting them. They are much more likely to quit or leave at the first opportunity for any job that seems better. They aren't invested in good customer service. They grow to resent their employers when they work full time and still don't make enough to afford basic necessities.
Its no surprise to me that paying workers a living wage (or even something close) results in measurable benefits for a business, in a variety of ways (not to mention immeasurably improving the lives of employees).
Further (since this seems like such an alien concept to most high-wage, HN members) getting paid a decent wage also allows massive benefits to the economy and society at large. We're currently looking at a global pandemic with the coronavirus. Given the apparent virility, it seems inevitable that this virus will spread to every country in short order. Most low wage workers don't get sick leave. Many get fired even for taking unpaid sick days. These are your cashiers, your grocery store workers, the people who make your coffee - the service industry workers who make up the bulk of American labor. Even those workers who won't get fired for taking sick days, often can't afford it. We've all seen the stats about the huge number of Americans who cannot afford an emergency expense of a few hundred dollars. Staying home sick qualifies. The containment efforts we've seen in South Korea and Italy have (so far) largely failed - and these are countries with universal healthcare and worker protections that we don't have. Right now it costs $3,200 to get tested for the coronavirus in the United States. Not treated - just tested! Working people cannot afford this and will not get tested, or treated - which will make the crisis worse. How much will this crisis end up "costing" us in the long run? If not this one, how much will the next, inevitable one cost us, because working people don't have the income or benefits to take care of themselves?
Massive kudos to this guy for paying his workers a fair wage. Hopefully other employers are enlightened enough to follow his lead and do the same, with the understanding that paying adequate wages benefits not only their business, but society and the economy at large.
> Its no surprise to me that paying workers a living wage (or even something close) results in measurable benefits for a business, in a variety of ways (not to mention immeasurably improving the lives of employees).
Not if their work doesn’t really differentiate the product. I have all the research I need about products from the internet, so I don’t need a store employee to sell me anything. Same with many other low paying positions. They are low paying because customers aren’t valuing the extra benefits of a non plug and play staff.
While I like good-feel news such as this, there is more to the story than meets the eye. Buried in the comments are links to news sources which go into further legal details.
This is very nice of the owner, but extremely inefficient economically. Which means most companies can't afford to do something like that. Only if your profit margins are huge.
Ineffficient? It would depend on the total value add of each employee. As stated, the performance of the company increased. The capability of individual employees increased.
Now, without exact numbers, I can't say economically this or that.
But effectively this was not a zero sum game. The company was not paying more for the same outcome, they were paying more for more output.
The output of the company increased. This is how investments are usually supposed to work, you put money in, and reap profits.
What makes this a bit more difficult to gauge that it's likely the increased performance does not come from individual output, but from a better cohesion of the team which generally makes things always easier and efficient.
What people often get wrong is that they think about wages atomically - I pay this guy this much and he delivers this. Whereas when you are having a team of workers (whose job is not to be a mindless drone) and whose output depends on the co-operationnof the individuals, often the second order effects are more important.
For example: rewards. You give a huge reward to the single top performer in your company. What happens? Everybody becomes jealous of him, and some will feel cheated since they contributed heavily to the projects the individual participated in. Future collaboration will likely suffer.
In fields were output is purely of individual performance (some sales jobs, logging, etc) this calculus is of course different. In these situations the atomic cost analysis probably works.
Can you elaborate a bit about what you mean by inefficient? People mean a lot of different things when they use the word “efficient” in a financial/economic context.
Amazon is low margin, Bezos could give up more wealth. Grocery stores are low margin, but I'm sure you could reduce the pay of Kroger's ceo. I'm trying to think of a company whose ceo makes millions that couldn't take similar steps to increase worker pay at the ceos expense and coming up with nothing.
And what about that one employee that tend to work more than the others(every company have one of those, maybe it's you), do you find it fair for him to get the same salary as everybody ? why would you better yourself and be more productive only to get paid the same as everybody.
Yes. Working more isn't what we should evaluate people on. It sets up perverse incentives that create long term damage by encouraging everyone to overwork.
What this guy did is a thing that most people wouldn't even consider. Looking outside of him and caring for other people more than himself, sacrificing himself for others. I won't say that he was right or wrong but that state of consciousness of seeing beyond your own ego and empathize with others like he did is a thing that we as humanity must nurture within ourselves if we want to survive and prosper in the long run. Prosperity and progress is not about power and money, it's about social communion and caring about others as much as we care about ourselves.
He raised everyone’s pay in response to a lawsuit that claimed he was paying himself too much. Also it gives the company less profit so if he has to buy out his partner (as a result of the lawsuit), he can do so for less.
Some comments were deferred for faster rendering.
dang|6 years ago
https://news.ycombinator.com/item?id=9371854
https://news.ycombinator.com/item?id=10450541
https://news.ycombinator.com/item?id=10448113
https://news.ycombinator.com/item?id=10657913
Related from 2016: https://news.ycombinator.com/item?id=12071667
bloblaw|6 years ago
Dan Price really is like what is presented in this article. He actually cares about his employees and is being genuine here. He's a good person, making a private business decision to increase the pay of frankly his lowest paid workers.
In a city where the average tech worker earns $275k a year, he believes its the right thing to do to make sure everyone that works for him at Gravity can earn enough to afford rent, food, and some fun.
Say what you will about the merits of decision, but it takes real leadership to make it and stand by it. I happen to think he's doing the right thing and I hope other companies choose to follow suit.
fahadkhan|6 years ago
He really does come across as great guy. If I was more local I would probably look to work for him.
Ligrev|6 years ago
Like, I could see somebody not feeling like that's fair so I'm wondering how the morale was impacted by that.
dominotw|6 years ago
I need to move to bay area this year. thats my sole mission this year.
sytelus|6 years ago
cyberferret|6 years ago
bloblaw|6 years ago
nbp160130|6 years ago
angarg12|6 years ago
I spent the first several years of my career working in academia for a poverty level wage.
I can confirm from my own experience that when you worry about not being able to pay rent and all the bills, it's very difficult to be productive, much less in a job that requires any kind of focus or creative thinking.
marcus_holmes|6 years ago
It's interesting but sad watching that creativity vanish as the rents rise. There's more money here now, but less creativity.
I think this apparent contradiction is resolved by asking "who had the time to be creative?". When rents were low, artists could make ends meet and still have time to create. As rents are rising, the artists are pushed out, or forced to spend more time making money. The new tenants are people earning decent money, who again are either working too hard to create, or are not "artistic" in that sense (me included).
The old squats and communal housing are being redeveloped, the graffiti-covered walls are being repainted so the houses they cover keep their value. The focus moves from "poor but sexy" to "let's make lots of money". Everyone is richer, except the culture.
conjectures|6 years ago
― Virginia Woolf, A Room of One's Own
mikorym|6 years ago
Not only do you worry about your own small income; but grants, scholarships, registration fees and a myriad of other things have in recent times become volatile and can be taken away from year to year.
Most of the issues is due to 1) our government being corrupt and 2) promises the government made about free education.
I am not against free education, but I am against impoverished professors.
This is why I decided to side-step academia. It is delaying my PhD by probably 3–7 years (I am at year 2's start now) but it's better than having in theory 100% time spent on a PhD but actually worrying about the University and your peers, your own future, etc. in reality.
pritovido|6 years ago
Basically in order to be productive under those circumstances you have to ignore reality, which can be problematic for the people around you.
But at the same time everything is relative on your perception of reality. We spend today 50-100 times more energy per person that people 100 years ago, and most of those people were happy.
We upgraded our expectations, specially because of mass media and advertisements and feel always dissatisfied because they will compare us with people that have more than we have.
raxxorrax|6 years ago
Lacking money occupies your mind, you just tend to forget if money isn't a problem anymore.
avip|6 years ago
pbhjpbhj|6 years ago
Not disagreeing, just trying to add some complexion.
agumonkey|6 years ago
water / food / electricity doesn't total high for my needs, rent on the other hand
I guess that's why artists lives in old buildings sometimes..
ps: also, call me crazy, but I think in a hunter settings you'd have more time to wander and create than todays city life. As long as there's enough rabbits around to grab ..
lordnacho|6 years ago
https://en.wikipedia.org/wiki/Henry_Cavendish
This guy managed to get a measurement of G (the one from high school physics) in his basement IIRC.
michaelgrafl|6 years ago
It's a shame that so often that thing seems to be how to pay rent on time, or being able to provide for your familiy financially.
ailideex|6 years ago
Who was paying you and could you not go do something else for money?
benibela|6 years ago
atlasunshrugged|6 years ago
Some articles that talk about the other side:
https://www.bloomberg.com/features/2015-gravity-ceo-dan-pric...
https://www.hundredeightydegrees.com/investigation/2018/2/27...
MetalGuru|6 years ago
“Gravity’s 2014 profit was $2.2 million, Price adds. At private companies with sales like Gravity’s total revenue, salary and bonus for the top quartile of CEOs is $710,000, according to Chief Executive magazine’s annual compensation survey. At companies with sales like Gravity’s net revenue, the top quartile pay falls to about $373,000. At companies with a similar number of employees as Gravity, the top quartile of CEOs makes $470,000 in salary and bonus. The CEO of JetPay, a publicly traded competitor that processes a similar volume as Gravity, received $355,000 in 2014.“
Yet his comp was $1.1MM?
“Price signed with the talent agency William Morris Endeavor Entertainment and now charges as much as $20,000 per speech, Pirkle says.”
Or his obvious avoidance to answering the direct questions. It’s cool what he did, but I don’t trust the guy. Or at least I doubt his motives are so honorable. Perhaps I’m too cynical.
eru|6 years ago
curiousguy|6 years ago
The hiring quality will also increased. For example, with a 40k salary, the company could hire someone with 5 years of experience, with 70k, they can find someone with 10 years of experience.
So in a few years the company will get rid of low performance and hired more skilled workers and the salary vs skill will match the market rate again. (with a few exceptions)
macspoofing|6 years ago
When they stop growing and increased competition will cut into their margins, and especially if they start losing money. At that point, they'll be looking at efficiencies everywhere - and those expensive employees will probably be laid off.
anentropic|6 years ago
The mentality of these people...!
Not people you want in your company
appleiigs|6 years ago
As senior employees, maybe they had stakes in the company. Maybe they didn't want to go through the above.
staticautomatic|6 years ago
dominotw|6 years ago
I have hard time believing this.
jessaustin|6 years ago
davidsawyer|6 years ago
FalconSensei|6 years ago
627467|6 years ago
flush|6 years ago
Not sure if this means ALL of his stock, but this doesn't seem to be the same thing.
unknown|6 years ago
[deleted]
arayh|6 years ago
smitty1e|6 years ago
But what works in a group smaller than Dunbar's Number[1] may not quite scale up.
Don't let that Politician Obfuscating Near You (PONY) con you into believing otherwise.
[1] https://en.wikipedia.org/wiki/Dunbar's_number
Mikhail_Edoshin|6 years ago
Real systems usually are mixes. E.g. Soviet system is largely slavery plus some bits of capitalism and a lot of propaganda to cover the monastery aspect. Or a capitalist company with a visionary leader may be quite a monastery too.
Now, the most pleasant way to work is indeed a monastery, but the one that scales well is capitalism :) Slavery is inferior on both counts, but may work when there's no way to add economic interest.
WalterBright|6 years ago
> in Seattle that wasn't enough to afford a decent home.
Because the population in Seattle has grown by leaps and bounds, if everyone could afford one of the supply of homes, the prices would go up until demand equals supply.
Pfhreak|6 years ago
eru|6 years ago
fallingfrog|6 years ago
However- it still needs to be said that we really ought to fight to create an economic system in which everyone has the means to have a comfortable life, even if individuals that make it up are not virtuous. Because this kind of story is a rarity, and the market will certainly punish him for his generosity.
ianlevesque|6 years ago
alharith|6 years ago
Why do you think everyone should have the means to have a "comfortable" life? Perhaps you mean means to meet necessities? If not, what does "comfortable" mean to you? Additionally, why do you think that the means are not there today?
macspoofing|6 years ago
1) Him making $1million salary at a small-medium company is quite a bit, but that may be because ...
2) ... the company is clearly making a lot of money (as in a lot of profit) and/or growing quickly. When you're growing and making huge profits at a software company, you can afford to pay above the market rate because you have spare cash. At some point that will change. The growth rate will plateau and they will cut salaries (maybe not for existing employees, but for new hires), or layoff expensive staff.
But props to Dan to get this done when he had the chance to.
tkyjonathan|6 years ago
37signals would be proud.
If you decentivize the most productive people, then you might hurt the rest of the company.
pcvarmint|6 years ago
misterti|6 years ago
kzrdude|6 years ago
photawe|6 years ago
Mikhail_Edoshin|6 years ago
claire-ah|6 years ago
earwetr|6 years ago
jschwartzi|6 years ago
programminggeek|6 years ago
numlock86|6 years ago
telesilla|6 years ago
kedean|6 years ago
The article specified that "two senior Gravity employees also resigned in protest". Do you have a source for "a lot of the high performers" outside of those two?
It sounds to me like it worked out for the company, regardless of the CEO's personal goings-on. It's a win for the idea that if you pay all your employees reasonably, they won't just fall back and let the company crumble. I think it's really important to point and show that this initiative, which so many people derided as ridiculous and guaranteed to fail, actually worked.
fsloth|6 years ago
I'm not sure what value the "high performer" qualification has in this instance. They were the highest paid, but I don't think we have any guarantees to their actual output. If the CEO is an untrustworthy agent (as some of the stories make him out to be) how can we trust any of the valuations of his employees?
atlasunshrugged|6 years ago
https://www.bloomberg.com/features/2015-gravity-ceo-dan-pric.... https://www.hundredeightydegrees.com/investigation/2018/2/27....
bloblaw|6 years ago
source: https://www.geekwire.com/2016/dan-price-70k-ceo-prevails-sui...
> Lucas Price served the suit on his brother prior to the $70,000 announcement, and the core allegations related to the preceding years. The suit alleged that Dan Price used his majority control of the company to pay himself excessive compensation, manipulate valuations of the company to his financial benefit, and charge hundreds of thousands of dollars in personal expenses to the company.
FWIW, Dan Price (owner of Gravity) is the real deal.
While I no longer work there, I am proud of what he is doing. He is a capitalist, making a decision as a private business owner to help improve the lives of his employees earning < $70k (in the expensive Seattle area mind you) by reducing his own compensation.
adultSwim|6 years ago
unknown|6 years ago
[deleted]
jmkni|6 years ago
epanchin|6 years ago
IAmEveryone|6 years ago
Journalism shouldn’t give coverage intended to benefit a company. But it’s just as important they don’t forgo telling a story they consider interesting just because it might incidentally benefit the subject.
codingmess|6 years ago
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unknown|6 years ago
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StanislavPetrov|6 years ago
Workers who feel they aren't being fairly compensated for their labor don't work as hard. They don't show as much attention to detail. They don't have any loyalty to their employers, who they perceive as exploiting them. They are much more likely to quit or leave at the first opportunity for any job that seems better. They aren't invested in good customer service. They grow to resent their employers when they work full time and still don't make enough to afford basic necessities.
Its no surprise to me that paying workers a living wage (or even something close) results in measurable benefits for a business, in a variety of ways (not to mention immeasurably improving the lives of employees).
Further (since this seems like such an alien concept to most high-wage, HN members) getting paid a decent wage also allows massive benefits to the economy and society at large. We're currently looking at a global pandemic with the coronavirus. Given the apparent virility, it seems inevitable that this virus will spread to every country in short order. Most low wage workers don't get sick leave. Many get fired even for taking unpaid sick days. These are your cashiers, your grocery store workers, the people who make your coffee - the service industry workers who make up the bulk of American labor. Even those workers who won't get fired for taking sick days, often can't afford it. We've all seen the stats about the huge number of Americans who cannot afford an emergency expense of a few hundred dollars. Staying home sick qualifies. The containment efforts we've seen in South Korea and Italy have (so far) largely failed - and these are countries with universal healthcare and worker protections that we don't have. Right now it costs $3,200 to get tested for the coronavirus in the United States. Not treated - just tested! Working people cannot afford this and will not get tested, or treated - which will make the crisis worse. How much will this crisis end up "costing" us in the long run? If not this one, how much will the next, inevitable one cost us, because working people don't have the income or benefits to take care of themselves?
Massive kudos to this guy for paying his workers a fair wage. Hopefully other employers are enlightened enough to follow his lead and do the same, with the understanding that paying adequate wages benefits not only their business, but society and the economy at large.
lotsofpulp|6 years ago
Not if their work doesn’t really differentiate the product. I have all the research I need about products from the internet, so I don’t need a store employee to sell me anything. Same with many other low paying positions. They are low paying because customers aren’t valuing the extra benefits of a non plug and play staff.
unknown|6 years ago
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shahedshah|6 years ago
themagician|6 years ago
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anonsivalley652|6 years ago
I'm not sure which is more applicable:
1. Hurray, decency.
2. Shouldn't getting excited about what would've been middle-class income 70 years ago be a sign how far workers' pay has fallen?
eru|6 years ago
The standard of living that 70k USD buys today is vastly better than what the median income bought in 1950.
(Of course, Seattle is rather expensive. The 70k USD would go much further in a city that didn't restrict residential construction so much.)
travbrack|6 years ago
Edit: I did the calculation backwards. Thanks to everyone who pointed that out.
RestAndVest|6 years ago
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wantedjean|6 years ago
bufferoverflow|6 years ago
fsloth|6 years ago
Now, without exact numbers, I can't say economically this or that.
But effectively this was not a zero sum game. The company was not paying more for the same outcome, they were paying more for more output.
The output of the company increased. This is how investments are usually supposed to work, you put money in, and reap profits.
What makes this a bit more difficult to gauge that it's likely the increased performance does not come from individual output, but from a better cohesion of the team which generally makes things always easier and efficient.
What people often get wrong is that they think about wages atomically - I pay this guy this much and he delivers this. Whereas when you are having a team of workers (whose job is not to be a mindless drone) and whose output depends on the co-operationnof the individuals, often the second order effects are more important.
For example: rewards. You give a huge reward to the single top performer in your company. What happens? Everybody becomes jealous of him, and some will feel cheated since they contributed heavily to the projects the individual participated in. Future collaboration will likely suffer.
In fields were output is purely of individual performance (some sales jobs, logging, etc) this calculus is of course different. In these situations the atomic cost analysis probably works.
benreesman|6 years ago
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