Update: the Company With the $70k Minimum Wage

business_ethics_highlights_2Back in April, a story broke about a company called Gravity that had decided to institute a minimum salary of $70,000 for all employees. Some people thought it a revolutionary move towards economic equality. Others scoffed. The update below is instructive. >>>

LINK: A Company Copes With Backlash Against the Raise That Roared (by Patricia Cohen in the New York Times)

…What few outsiders realized, however, was how much turmoil all the hoopla was causing at the company itself. To begin with, Gravity was simply unprepared for the onslaught of emails, Facebook posts and phone calls. The attention was thrilling, but it was also exhausting and distracting. And with so many eyes focused on the firm, some hoping to witness failure, the pressure has been intense.

More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business….

What do you think?

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  1. Alexei Marcoux

    To me, the most interesting part is that Gravity head and majority owner Dan Price is being sued by his minority owner brother. Dan Price is funding his experiment in social justice, in part, with his brother’s money—and against his brother’s will. That makes Dan Price a faithless fiduciary. It would be one thing if Dan Price were the sole owner of Gravity. It’s quite another when there are other equity owners in Gravity. The story thus parallels the landmark Michigan Supreme Court case of Dodge v Ford (1919). Dan Price is, in an interesting sense, a 21st Century Henry Ford.

  2. Francis Bellamy

    I suppose the crucial question is whether or not profits and dividends fall. Is that a foregone conclusion?

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