The founder of a credit card payments company in the western U.S. city of Seattle is taking a huge pay-cut in order to give every one of his employees a big raise.
Dan Price, owner of Gravity Payments, told his employees this week that he is slashing his own $1 million per year salary to $70,000. He will use that money and company profits so every employee would earn a base salary of $70,000, to be phased in over three years.
He says the cost of living is rising rapidly in Seattle and the salaries should increase with it. The company currently pays an average of $48,000 a year to its 120 employees. Seventy of them will see a wage increase under this plan and 30 of them will see their salaries double.
Price's announcement at a company meeting brought wild applause from his employees, with some saying it would enable them to start a family sooner, buy a home or pay off credit card debts or student loans.
Earlier this month, Seattle's minimum wage law went into effect, which will eventually raise base hourly pay to $15. It's phased in more quickly for big companies. Large businesses and national chains had to raise their minimum wage to at least $11 an hour when the law took effect April 1, while smaller businesses now must pay at least $10 per hour.
Washington state already has the nation's highest minimum wage at $9.47 an hour.