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Price is Right

The Seattle CEO says the American Dream is Still Worth Fighting For

Dan Price made headlines in 2015 when he raised the minimum salary in his company, Gravity Payments, to $70,000. The move was met with mixed emotions in the media. A cover story in Inc. Magazine praised him as "the best boss in America." In the same year, a reporter at Bloomberg insisted the CEO had "something to hide," suggesting the decision was a PR stunt.

A particularly vocal critic was the conservative radio host Rush Limbaugh.

“He’s chosen $70,000 as an arbitrary salary because he read that’s where people are happy,” Limbaugh said of Price on his show. “And he’s gonna find out — (laughing) — it isn’t gonna take long because once everybody figures out they’re all making the same, no matter what they do, the slackers are gonna surface. Human nature.”

Price says he sees human nature through a different lens. He argues that human nature can often be guided by circumstances. If someone is perpetually drowning in debt-induced anxiety and a low sense of self-efficacy, they’re less likely to believe they can achieve the things they want -- like success at work. However, when someone has their basic needs met (think Maslow’s Hierarchy) it can instill a sense of confidence that pushes them to achieve more than they’d imagined they were capable of.

"I would personally just love to have the opportunity to talk to Rush about it,” Price says. “You know, I grew up listening to Rush Limbaugh from 10am-1pm every day in a conservative Christian family, in rural Idaho about an hour outside of Boise. He raises some interesting points about different world views."

Limbaugh predicted a grim view of Price’s world in 2015 when he said that the CEO’s $70,000 minimum salary would become a case study for why it’s a disastrous idea. When Price raised pay for his employees, he slashed his own. He went from making more than one million dollars a year to making just seventy grand. A few months after the decision, rumors swirled that he’d started renting his house out to make ends meet. Limbaugh took to his radio show to declare victory. “It sounds like the whole company may fold now,” he said. “That’s how bad things have gotten... this was perhaps the worst thing that happened.”

Price says he did rent his home out through Airbnb to bring in extra cash during the adjustment. He tells me he stayed with friends and “had a great time.” He never tried to hide it. In fact, while his house was rented out, he even participated in a video interview with The New York Times from his garage (after getting permission to do so from the family of renters living in his home).

Gravity Payments hasn’t “folded,” as Limbaugh insisted it would. In fact, it’s tripled its revenue since 2015. Last year, Price opened a second location in Idaho. Even with Boise’s lower cost of living in comparison to metropolitan Seattle, the new office is on track to have a base salary of $70,000 within a few years.

"We have a world where 86 percent of all new wealth generated in 2017 -- which is the last year we have these statistics -- went to the top one percent, and the rest everybody else shared the other 14 percent,” Price says. He wants to change that.

Rush Limbaugh was right about one thing. The move to raise minimum salaries at Gravity Payments is being used as a case study... at Harvard -- but, not as the failure he’d assured listeners it would be.

"We as Americans, we used to really believe in ourselves, that we could solve those things,” Price says. “And we had this idea of 'we the people' and it seems like that's really been eroded. And now, what I hear out there is a lack of confidence that 'we the people' can solve any problems. And I do think that's a shame because it's a self-fulfilling prophecy. My approach to it, and what I share with people, is, well, we have to at least try."

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