Gravity Payments CEO Dan Price announced Friday his business had hit hard time just three months after he had set a $70,000 minimum wage for all his employees.
“It’s just as painful for me as anyone else,” Price told The New York Times. “There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs.”
In April Price made national headlines when he announced his plan to set the company-wide minimum wage. The founder of the Seattle-based credit card processing firm wanted to give all his employees a decent shot at a middle class life. He even cut his own salary to make sure it could happen. As a result Price quickly earned praise from minimum wage advocates across the country.
“Income inequality has been racing in the wrong direction,” Price said. “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”
That was until his company was hit with several unexpected costs like a lawsuit and employees leaving. Many of the more skilled and experienced workers felt the new policy didn’t reward those who worked the hardest. New employees essentially got their pay doubled while the more experienced and most skilled workers saw little or no raise.
Price set his plan in motion not long after the city itself announced it would gradually raise its minimum wage to $15 an hour. Mayor Ed Murray made the announcement in May making the city one of only a few places with such a high minimum wage. The first increase of $11 took place in April and is expected to reach $15 by 2017 for most businesses.
Labor unions and their supporters have been the main force behind the movement to a higher minimum wage. While advocates say it will help the poor and stimulate the economy, opponents warn it could lead to job loss.
Though it is one of the more dramatic examples, Gravity Payments is not the first company to create its own higher minimum wage. In the first few months of 2015 those like McDonald’s, Gap, Walmart, Target, and TJ Maxx among others also did as well.