Have you heard about how Gravity Payments, a start-up company based in Seattle, is implementing a plan to give every employee a base salary of at least $70,000 a year? I just read about it today in this article, One Company’s New Minimum Wage: $70,000 a Year, and it made my heart do a little dance of joy. It’s a pretty incredible leap from the “Fight for 15” movement which is pushing for minimum wage bumps to $15 an hour at fast food companies.
Citing happiness research as his impetus for this new salary minimum, Dan Price, CEO of Gravity Payments, said that the idea came to him after reading a study that said that for people who make less than $70,000 a year, extra money makes a huge difference in their lives.
Patricia Cohen, the author of the article, succinctly states the research here:
“The happiness research behind Mr. Price’s announcement on Monday came from Angus Deaton and Daniel Kahneman, a Nobel Prize-winning psychologist. They found that what they called emotional well-being — defined as “the emotional quality of an individual’s everyday experience, the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one’s life pleasant or unpleasant” — rises with income, but only to a point. And that point turns out to be about $75,000 a year.”
So I guess we should all aim to make at least $75,000 a year? Easier said than done, I know. Because, if you’re like me, in a less traditional, perhaps more artistic or non-profit type job, that’s not all too easy to attain. And sometimes, if a job offer that pays that much comes your way, you may have to choose between salary or higher personal satisfaction? For me, I’ve often chosen the latter – which is why…true money confession…I’ve never made $70,000 a year. Not yet, at least. When I do make that amount, it will nice to not stress about going out to nice dinners with friends, or being able to buy nice gifts for people, or treating myself to something randomly without thinking too much about the financial consequences. Since my tastes are pretty minimal, I think I could do that on a salary of $70,000 a year.
Currently, the average salary of an employee at Gravity Payments is $48,000. So that’s a pretty sweet bump for those employees whose salaries are in the average range. One of the other reasons Dan Price instituted this change was because he felt the discrepancy between CEO/top leadership pay and regular employees salaries was absurd.
I hope the company continues to stay profitable and that the employees end up being more invested and productive in their jobs, so that perhaps one day this can be a model for other companies.