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The boss who put everyone on 70K

bbc.com

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Re: The boss who put everyone on 70K

#31

Post by luckylion »

mister_hn wrote: post #13
bufferoverflow wrote: post #5

This is very nice of the owner, but extremely inefficient economically. Which means most companies can't afford to do something like that. Only if your profit margins are huge.

Like Amazon, Facebook, Google, Apple or Microsoft?

Amazon has huge profit margins because they don't do this. If they paid their warehouse staff, drivers etc a minimum of $70k a year, their retail margins would look very different.

For Facebook, Google, Apple and Microsoft, not much would change, they don't employ that many people below the threshold, I think, unless you count the outsourced contractors that do moderation, annotation etc. This company's policy doesn't extend to the company they outsource the cleaning of their office to either, so that wouldn't be a fair comparison.

Re: The boss who put everyone on 70K

#32

Post by throwqwerty »

domlebo70 wrote: post #23
benreesman wrote: post #22

Earlier quoted context omitted.

Can you elaborate a bit about what you mean by inefficient? People mean a lot of different things when they use the word “efficient” in a financial/economic context.

Well would you pay 10 dollars a liter to fill your car up, when you can get perfectly good fuel for $1.50 a liter?

but people aren't commodity goods so what exactly does that example prove?

Re: The boss who put everyone on 70K

#33

Post by watr »

wyager wrote: post #21
fsloth wrote: post #16

Earlier quoted context omitted.

Ineffficient? It would depend on the total value add of each employee. As stated, the performance of the company increased. The capability of individual employees increased. Now, without exact numbers, I can't say economically this or that. But effectively this was not a zero sum game. The company was not paying more for the same outcome, they were paying more for more output. The output of the company increased. Thi…

You have no skin in the game, so you should discount your (displayed) confidence a bit. Obviously if paying more money was a guaranteed way to increase net productive output, the people with skin in the game who think about this every single day would do it. > This is how investments are usually supposed to work, you put money in, and reap profits. You are using cargo-cult reversed-causality reasoning. Just because y…

> You are using cargo-cult reversed-causality reasoning. Just because you put money into something doesn’t mean you should expect to get more money back out. If I dig a big hole in the ground and throw wads of cash into it, I don’t expect market returns.

You should just read the article again. It does actually mention the changes that were observed after the 70k minimum.

Talent retention and employee satisfaction goes a long way productivity-wise.

Re: The boss who put everyone on 70K

#34

Post by WalterBright »

Since it's working for Dan and his company, great!

> in Seattle that wasn't enough to afford a decent home.

Because the population in Seattle has grown by leaps and bounds, if everyone could afford one of the supply of homes, the prices would go up until demand equals supply.

Re: The boss who put everyone on 70K

#35

Post by MetalGuru »

atlasunshrugged wrote: post #8

I think it's important to mention some other sides of this story, namely that the raise came right around the time his brother filed a lawsuit for him overpaying himself and domestic abuse allegations. I don't remember the articles exactly but there were some rumors that this change was a PR stunt and shield for him Some articles that talk about the other side: https://www.bloomberg.com/features/2015-gravity-ceo-dan-…

Some of my favorites from the first article:

“Gravity’s 2014 profit was $2.2 million, Price adds. At private companies with sales like Gravity’s total revenue, salary and bonus for the top quartile of CEOs is $710,000, according to Chief Executive magazine’s annual compensation survey. At companies with sales like Gravity’s net revenue, the top quartile pay falls to about $373,000. At companies with a similar number of employees as Gravity, the top quartile of CEOs makes $470,000 in salary and bonus. The CEO of JetPay, a publicly traded competitor that processes a similar volume as Gravity, received $355,000 in 2014.“

Yet his comp was $1.1MM?

“Price signed with the talent agency William Morris Endeavor Entertainment and now charges as much as $20,000 per speech, Pirkle says.”

Or his obvious avoidance to answering the direct questions. It’s cool what he did, but I don’t trust the guy. Or at least I doubt his motives are so honorable. Perhaps I’m too cynical.

Re: The boss who put everyone on 70K

#36

Post by nbp160130 »

cyberferret wrote: post #3

Just to clarify - the article mentions that he put everyone in the company on a minimum salary of $70K. I would think that high level technical staff on $100K+ would have been more than a little upset to have their salary slashed. Junior staff members are the winners here!

I can't find any mention of technical staff having their salary slashed. The only mention of pay cuts is the one the CEO took. Would you mind sharing a source where this is stated?

Re: The boss who put everyone on 70K

#37

Post by mandelbrotwurst »

eru wrote: post #6
anonsivalley652 wrote: post #2

Note: I heard this story around 2015-2016. https://news.ycombinator.com/item?id=9371854 I'm not sure which is more applicable: 1. Hurray, decency. 2. Shouldn't getting excited about what would've been middle-class income 70 years ago be a sign how far workers' pay has fallen?

Where do you get that 'middle-class income' from? The standard of living that 70k USD buys today is vastly better than what the median income bought in 1950. (Of course, Seattle is rather expensive. The 70k USD would go much further in a city that didn't restrict residential construction so much.)

Sure, but these jobs are in Seattle!

Re: The boss who put everyone on 70K

#38

Post by jsty »

nbp160130 wrote: post #36
cyberferret wrote: post #3

Just to clarify - the article mentions that he put everyone in the company on a minimum salary of $70K. I would think that high level technical staff on $100K+ would have been more than a little upset to have their salary slashed. Junior staff members are the winners here!

I can't find any mention of technical staff having their salary slashed. The only mention of pay cuts is the one the CEO took. Would you mind sharing a source where this is stated?

I think they mean that if the headline is taken as written it implies everyone in the company being moved onto 70k - even if their salary was originally higher, not that the article actually states that this happened.

Re: The boss who put everyone on 70K

#39

Post by eru »

nbp160130 wrote: post #29
mzi wrote: post #17

Earlier quoted context omitted.

I found this link[0] that tells us that the median income - adjusted for inflation - seems to be rising since 1967. https://www.davemanuel.com/median-household-income.php

This is measuring household income, not individual income. Real household income isn't increasing because wages are rising, it's increasing because more people in a household are working.

On the other hand, household sizes have decreased.

(Though not sure about workers per household.)

> [...] it's increasing because more people in a household are working.

More people are working outside the house and participating in the market economy. Women worked before, domestic chores don't show up in these statistics.

Presumably they produce a lot more working outside the house: to estimate a monetary value of what they did before compare with the prevailing wages for nannies and housekeepers.

Re: The boss who put everyone on 70K

#40

Post by eru »

mandelbrotwurst wrote: post #37
eru wrote: post #6

Earlier quoted context omitted.

Where do you get that 'middle-class income' from? The standard of living that 70k USD buys today is vastly better than what the median income bought in 1950. (Of course, Seattle is rather expensive. The 70k USD would go much further in a city that didn't restrict residential construction so much.)

Sure, but these jobs are in Seattle!

Yes. Alas, the article doesn't say whether that supposed calculation they did was for Seattle or for the US in general.

(The article implies it's for 'Americans'. But it's just not very precise.)

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