Sunday, August 02, 2015

A CEO raised his company's minimum wage to $70,000 a year, and some employees quit because of it

Well, I suppose he meant well and is paying the price for it. At the same time I'd rather a business decides to raise wages voluntarily than to just depend on government to raise the minimum wage.
The New York Times reports that two of Gravity Payments' "most valued" members have left the company, "spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises."

Maisey McMaster — once a big supporter of the plan — is one of the employees that quit. McMaster, 26, joined the company five years ago, eventually working her way up to financial manager. She put in long hours that "left little time for her husband and extended family," The Times says, but she loved the "special culture" of the place.

But while she was initially on board, helping to calculate whether the company could afford to raise salaries so drastically (the plan is a minimum of $70,000 over the course of three years), McMaster later began to have doubts.

"He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump," she told The Times. A fairer plan, she told the paper, would give newer employees smaller increases, along with the chance to earn a more substantial raise with more experience.
Probably a small part of the story but an important one. Another part of this story indicated that his salary was public because he worked at this company and was concerned he may not be able to move on. He probably was concerned about another company's salary expectations.

Either way, this is the action I could support more than increasing the minimum wage which has been popular around the country. But of both we're seeing some effects of attempting to address "income inequality".

Do you offer a blanket raise voluntarily to everyone in a company? Does a business wait for the minimum wage to go up? And at that what effects would either have for either the business or the labor force itself?

UPDATE 12:08 PM - I forgot to note that the owner of this company Dan Price reportedly has to resort to renting out his home to meet payroll.

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