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Last year, Gravity Payments announced that it was struggling, like many businesses, during the early months of the coronavirus pandemic. Some people thought the Seattle company had gone belly-up.
“When you Google ‘Gravity Payments,’ Google Autocomplete says ‘Is Gravity Payments still in business’ or ‘Is Gravity Payments bankrupt?’” CEO Dan Price, who grew up in Melba and Marsing, said Wednesday by phone. “I still see comments from people basically saying that the company went bankrupt.”
On Tuesday, six years to the day that Price slashed his $1.1 million salary to boost his company’s starting wage for all employees to a minimum $70,000 a year, Price posted a series of tweets to let people know that Gravity Payments’ unorthodox business plan has been a success.
“6 years ago today I raised my company’s min wage to $70k,” one tweet said. “Fox News called me a socialist whose employees would be on bread lines. Since then our revenue tripled, we’re a Harvard Business School case study & our employees had a 10x boom in homes bought.
“Always invest in people.”
When Price first announced his plan, conservative radio commentator Rush Limbaugh, who died Feb. 17, called it “pure unadulterated socialism, which has never worked.” Other conservative commentators laughed at Price.
“I grew up listening to Rush Limbaugh from 10 to 1 every day,” Price told the Statesman. “I grew up believing that if the political party I liked had complete power over everything, then the world would be a utopia.”
He altered his business model after a 32-year-old Gravity Payments phone tech earning $35,000 a year in 2011 told Price he wasn’t earning enough to lead a decent life. Initially stung by criticism that he was getting rich at his employees’ expense, Price gave his workers 20% raises for each of the next three years before launching his $70,000 minimum wage.
At the beginning of the pandemic, Gravity Payments’ $4 million monthly revenue plummeted by half. Price cut his salary to zero. Ten other executives also agreed to work for free, while 24 others said they would work for half their salary.
All of Gravity’s 210 workers in Seattle and Boise volunteered to take cuts of 5% to 10%. Without the cuts, the company would have been forced to lay off 40 workers.
Today, revenue is back up, though slightly below prepandemic levels. Still, Gravity Payments has repaid the money workers lost when they agreed to the pay cuts, and the company recently began handing out raises of between 5% and 6%.
The company plans to increase its workforce by 10% to make the workload easier, Price said.
Gravity Payments doesn’t buy advertising to alert people to job openings, but it gets an overwhelming response when Price tweets about them. A single tweet for recent openings brought 3,000 resumes.
“There’s a lot of companies out there that are having a hard time with hiring and having a hard time with turnover,” Price said., “For every open position, we got over 300 applicants, and our turnover has been cut in half.”