It’s been over a year since the CEO of Gravity Payments announced that he would reduce his own salary from $1 million to $70k in order to give his employees a $70k minimum wage. So how are things working out? Is it true that $70k is the point where people stop worrying about money and become satisfied with their salary?
Gravity Payments has shared their experience on their website so we can all see what impact the $70k minimum wage has had on their company.
The Current Minimum Wage
The company didn’t just increase everyone’s salary to $70k right after the announcement. It has been a phased in program. The current minimum salary is $50k. However, the average salary of employees has increased from $48k to $72k.
People Are Saving More
Employees are not out spending all that extra money. Since the minimum salary was increased contributions to the 401k plan have increased by 130%.
People Are Commuting Less
Some employees were able to move closer to work because of the pay increase, which means less time commuting. I lived in Seattle early in my career and don’t miss that commute at all. I’m positive that I would have been a much happier employee if I had been able to live closer to work and spend less time on the bus! Who knows? Maybe we would still live there.
Profits Are Up
Gravity Payments has reported that profits nearly doubled from $3.5 million in 2014 to $6.0 million in 2016. Without additional information it’s hard to know what impact the $70k minimum wage had on that increase, but so far both the company and employees are earning more.
Gravity Payments has a great infographic on the impact of the $70k minimum wage on their company and employees.
What impact would a $70k minimum wage have on your company?