Remember that company that decided it would pay its lowest paid employee $70,000 a year? It’s currently experiencing difficulties financially, but not for the reasons you think. It’s not that the company suddenly has labor costs shooting through the roof. Instead, selfish employees who work higher up in the company were envious that people “got such a big raise” (i.e. were suddenly compensated like they were being valued) while their raises weren’t as high. Also companies that had contracts with Gravity Payments didn’t like this whole idea of paying workers more, so they didn’t want to encourage the behavior.
From the article:
More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase — despite repeated assurances to the contrary — also left. While dozens of new clients, inspired by Mr. Price’s announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has already had to hire a dozen additional employees — now at a significantly higher cost — and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.
Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees.
This is why we can’t have nice things.
