A Seattle-based company is giving some credence to the idea that businesses do benefit when they pay their employees more.
Back in April, Dan Price, CEO of Gravity Payments, created a bit of a media maelstrom when he announced a three-year plan to pay all of his employees a minimum salary of $70,000 a year.
Price was spurred to action after realizing that his fears over persistent post-recession economic woes had led him to pay some staff well below what they needed to live. (At the time, the average salary at Gravity Payments was $48,000 a year.)
Now, six months later, the credit card payment processing company appears to be thriving. According to a new report from Inc. Magazine, revenue and profit at Gravity have doubled over the past year and customer retention is up. Employee retention has been solid, too, despite concerns that experienced staff members might balk at making the same salary as their entry-level or relatively inexperienced counterparts.
Of course, Gravity’s pay policy isn’t the norm, even beyond the somewhat controversial idea of offering all employees a set salary. (Opponents mainly argue that, in order for companies to do so, the price of their goods would have to go up and workers may not increase productivity if there’s no incentive to do so.) According to U.S. Census data, median household income in the U.S. was $53,657 in 2014 (essentially unchanged from the year before) and federal minimum wage stands at $7.25 an hour, though some major corporations have moved to pay hourly employees more in recent months.
Padding Your Paycheck
Whether more companies will be inclined to raise wages as we get further away from the recession remains to be seen. In the meantime, you may be able to increase your paycheck by negotiating a raise with your employer or researching and applying to companies that are known to offer better compensation packages to qualified employees.
And, if you’re struggling to pay off debt on your current paycheck, you may want to track your spending in order to better understand where exactly your hard-earned dollars are going. You may be able to make a few budget cuts that could decrease your reliance on credit cards, which would, in turn, benefit your wallet and your credit score. (You can see how your existing debts may be affecting your credit by pulling your free credit report summary on Credit.com.)
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