10.26.2015

Dan Price and the Parable of the Workers Paid Equally

Since I first heard about Dan Price in an August article, in Yahoo News, I've been wondering how he and his company (Gravity Payments,) have been doing. Dan Price came to be known as the C.E.O who decided to take a paycut and raise the minimum wage of his employees to $70,000 per year.  Price made this decision after speaking to a frustrated employee (Jason Haley,) about what it was like living trying to live on $35,000 a year. "You brag about how financially disciplined you are," the man said,  "but that just translates into me not making enough money to lead a decent life." Price was taken aback. His salary was competitive with what was going in the market. Was that really not good enough? He began to wonder. After some soul searching, Price set about an ambitious program. He dramatically raised his staffs pay in 2012 and again in 2013. In 2015 he made the announcement that would make him famous (or infamous). In July 2015, he raised the minimum wage of his company to 70,000, and shortly thereafter came a hail of praise and condemnation.
Some of the earliest opposition came form within the company itself, his brother (and partner), initiated a lawsuit, and two disgruntled employees left the company. Outside,  a few clients left because they suspected mismanagement of the company. And with increased publicity, came increased censure, in the form of dire predictions, and accusations of socialism (cf. Don't go the way of Gravity Payments).

It is hard for me not to draw a comparison to the parable of the parable in Matt 20:1-16. Jesus tells a story about a manager who hires people at different hours of the day promising to pay each of them what is fair. At the end of the day he gets the people who were hired last (and worked the least amount of time) first, and tells them he is going to pay them for a full days work. They are ecstatic. Then he brings the people who worked all after noon, and pays them the same thing. Then he brings the people who worked since morning, and pays them the same thing. Predictably, the people who worked the longest were angry. "We worked through the hottest part of the day," they said, "and you are paying them the same as us?" The manager said "I am not being unfair to you. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?”



That is a good question to ask the critics of Dan Price, we live in a supposedly "Free Market". Does Dan Price have the right to pay his employees as he sees fit? Are they critical because his actions remove the fig leaf, and expose the naked truth about what kind of wages the market can actually bear? Clearly their censure means they do not think he is free to fail or prove them wrong. Just how free is the market then?


So how is Gravity Payments doing?  Well, they are still here. The dire predictions though still raising suspicions of failure - have not happened yet. Price's actions have caused many other business owners to follow suit in raising their employees salaries, and the increased publicity and public goodwill have inspired many people to seek to form new relationships with a company that is trying to do the right thing.


Six months after Price's announcement, Gravity has defied doubters. Revenue is growing at double the previous rate. Profits have also doubled. Gravity did lose a few customers: Some objected to what seemed like a political statement that put pressure on them to raise their own wages; others feared price hikes or service cutbacks. But media reports suggesting that panicked customers were fleeing have proved false. In fact, Gravity's customer retention rate rose from 91 to 95 percent in the second quarter. Only two employees quit -- a nonevent. Jason Haley isn't one of them. He is still an employee, and a better paid one." (Inc.)
As employers cite fears of raising the minimum wage, or even having one to begin with, Dan Prices actions reveal those fears for what they are - a cover for injustice. Not that every employer can afford to pay $70,000 to their employees, but that the cries of discontent coming from working people, are not unreasonable.
1Now listen, you rich people, weep and wail because of the misery that is coming on you. Your wealth has rotted, and moths have eaten your clothes. Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter.[a] You have condemned and murdered the innocent one, who was not opposing you. (James 5:1-6)


One thing I haven't mentioned, Price has been a Christian his whole life. Asked if his faith had anything to do with his decision, he answered.

"All that stuff is in my DNA. It's who I am," Price said. "To me it's a values thing -- I learned those values through Christianity and the Bible and my upbringing," he said, though other sources also may have contributed. "For me, lowering my pay by a million dollars was an act of selfishness," he said. "[Raising employee salaries] was one of the happiest moments of my life. Nothing I could have spent that money on would have made me that happy." (Inc. 5000)


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