Dealing with the fallout, Dan Price

Dealing with the fallout, Dan Price

I came across an article that described one man’s transition to pro-choice, and I have to say, it’s persuasive. Let’s take a listen to his reasons, and see if you are convinced.

(And then let’s all exhale. You’ll understand when you listen to the episode.)

Dan Price of Gravity Payments set a minimum wage of $70K/year and dropped his pay to that level. He was hailed as a hero 4 months ago, before any fallout from the change had even occurred. Well, some things have fallen out, so let’s revisit Dan and see how his decision has played out.

Mentioned links:

10 reasons why I’ve decided to become pro-choice.

3 Week Mark: Nets Spend 92 Minutes on Cecil the Lion; 20 Minutes on Abortion Videos

A Company Copes With Backlash Against the Raise That Roared

Why A $70,000 Minimum Salary Isn’t Enough For Gravity Payments

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Show transcript

Becoming pro-choice is not something that happens often. Heck, switching sides is rare enough, regardless of where you’re going from or to. But J. L. Pattison, in a blog post entitled, “10 reasons why I’ve decided to become pro-choice”, makes some points that really are worth checking out.

In fact, he’s almost convinced me, which, if I may be so bold, is saying something. I’m not sure I’m completely on board – not all of his points are equally good – but he made me consider this.

The link is in the show notes, in case you want to find his arguments, but I want to highlight the first one here, just to give you an idea of his power of persuasion.

1). Although I am personally opposed to the practice, I do not want to impose my moral values upon others. So if someone else wants to hunt lions, then who am I to judge? My motto is: If you don’t like lion killing, then don’t kill one.

OK, you can exhale now. You really do want to check out the link to this in the show notes. The other 9 “reasons” do basically the same thing; turn abortion pro-choice arguments on their head and expose the inverted priorities of a society that values the life of a lion in a country they probably couldn’t pick out on a map, over the millions of babies killed since Roe v Wade. I call them “babies” because that’s what Planned Parenthood calls them when referring to their organs, harvested for profiteering. Also, because that’s what they are.

Oh, and in the 3 weeks from the beginning of the release of those videos exposing Planned Parenthood, the media have reflected, and some might say “supported” or “egged on”, those inverted priorities. During that time, the 3 broadcast networks spent 92 minutes on Cecil the Lion, and 20 minutes on the videos and subsequent political fallout. Yup, that liberal media.

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Sherman, set the Wayback Machine to April, 2015. Back in that day, Dan Price set the liberal’s hearts all a-flutter when he announced that he would pay all his people, over the course of 3 years, a minimum of $70,000. At the same time, Dan, the CEO of Gravity Payments, would drop his own salary from $1 million to $70,000 as well.

Those pushing for an increase in the minimum wage loved the idea. With no more than an announcement in hand, they proclaimed his move as an example others should follow. Again, all they had was an announcement. They proclaimed victory even before the new pay scale was in place, because for these liberals, intentions are more important than results.

Now here in August, we have a few results, and they’re not looking good for Gravity Payments. First off, some clients – some put off by what appeared to be a political statement, some by a concern that the fees will rise – dropped the company. Gravity has assured clients that the fees will stay the same, but there’s a perception working against him, that you can’t raise the cost of doing business without offsetting at least some of that cost. Maybe that’s all perception; we’ll see. But if you have a vendor that could be increasing its costs, it only makes sense that you might want to look for a cheaper vendor.

On the other side of the coin, Gravity Payments got more clients who appreciated the political and social statement that Dan Price made, and signed on. It appears that they did offset the number of clients who left, but for now, the economic impact of the new clients isn’t enough. New clients take over a year to be profitable for Gravity, so it’s not just a 1-for-1 trade-off. And he’s had to hire new employees to deal with the new clients, at the new, higher pay rate, which, again, impacts the bottom line.

But here’s the effect that surprised me the least. Two of Mr. Price’s most valued employees quit. Two may not seem like a lot, but it’s a rather small company. This was 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. For a large swath of Gravity employees, there is no such thing as “merit pay”. The lower tier of employees gets the same amount regardless of their productivity. Even one of the employees in that tier quit because he saw how it “shackles” the low performers to the high performers.

In speaking about his ideals, Price had this to say, quoted in the NY Times:

“Income inequality has been racing in the wrong direction,” he said. “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”

No, see, that’s the issue, and it’s why some of his better employees are leaving. These raises were not based on how hard you worked, and that’s going to give observant workers some cause for concern.

And then there’s the big bombshell. While not directly related to the pay raise, a lawsuit brought by his co-owner and brother may be more than the company can handle. With profits going more into salaries, there is a decreasing amount available for a rainy day, or for a buyout demand. Y’know, regardless of the merits of the case, sometimes a business needs cash sitting around to be able to handle such situations. Otherwise, any hitch in the revenue flow could put them, and their well-paid employees, out of business. Sometimes those big profits are a cushion to keep any bumps in the road from causing folks to lose their jobs. Those who dismiss that don’t, I think, understand the gravity of the situation.

Dan Price might be learning by experience, but I fear the lesson is being lost on others.

Filed under: AbortionAfricaCapitalismEconomics & TaxesMediaMinimum WageSocialism