A recent article in The Tennessean, Nashville’s daily newspaper, highlighted the housing challenge for low income workers. A study found that the average wage needed to rent a one-bedroom apartment in Nashville is $13.75 per hour ($16.35 for a two-bedroom). This $13.75 per hour is not only about double the minimum wage, but is $1.94 per hour greater than the state average income. This housing difficulty for low wage workers is just one of the symptoms of our out-of-whack income inequality in this country.
But one man is doing something about it. Dan Price, founder of Gravity Payments, a credit card processing firm based in Seattle, recently announced a startling new wage structure for his company. Last month, Mr. Price set out on a plan to raise the salary of every employee to a minimum of $70,000 per year. This, at a company where the current average salary is $48,000 per year. You can read about his plan here.
How does he intend to pay for it? For starters, Mr. Price is cutting his salary from nearly $1 million per year to $70,000. In the New York Times article, he is quoted, “The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd. As much as I’m a capitalist, there is nothing in the market that is making me do this.” And that is the beauty of what Dan Price is doing. Mr. Price is breaking free from the injurious notion that drives American business – what is the lowest possible wage I can pay my workers in this market?
Did you notice the word “market” in the quotes of Mr. Price? The market rate for CEOs is ridiculous – his words, not mine. And the market is not requiring him to raise salaries. He is actually going against what the market requires. Why?
What is not reported in the NY Times piece is that Mr. Price is a believer who is interested in “granting justice and fairness” to his workers and maybe a little generosity thrown in. He recognizes that in the Seattle area, a salary below $70,000 per year makes it difficult to buy a house or save for your children’s education. He wanted to do something about the financial pressures workers face when hit with a rent increase or unexpected car repair or nagging credit card debt.
I salute Mr. Price. I hope his example will be followed by others. He has his critics to be sure. But in my opinion those critics are narrow-minded and missing the biblical admonition to “grant your workers justice and fairness.”