Liberal Seattle CEO who instituted minimum salary of $70,000 finds that doesn’t work so well

In a way, I have to admit, I have some sympathy for Dan Price and his quixotic quest to battle “income inequality” by instituting a minimum salary of $70,000 for all employees of his company. Not for the cause itself, which is merely the latest trend in left-wing economic illiteracy, but I too once ran a business in which I thought I could do amazing things by paying people way more than their experience levels or qualifications would earn them anywhere else.

It didn’t work for two reasons. First, a business can’t survive when employees can’t generate enough value to give you a big enough return on what you pay them. And if they can’t do that because you paid them too much, that’s not on them. It’s on you. Second, people don’t appreciate what they haven’t really earned. You think they’re going to be grateful and loyal to you because you were so good to them. It doesn’t work that way.

So as soon as I heard some months back that Price was going to wage his own one-man war against “income inequality” by paying everyone at Gravity Payments a minimum of $70,000 - and would even cut his own pay to help the company swing it - it wasn’t hard to see this coming:

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. Others, anticipating a fee increase — despite repeated assurances to the contrary — also left. While dozens of new clients, inspired by Mr. Price’s announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has already had to hire a dozen additional employees — now at a significantly higher cost — and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last. 

Two of Mr. Price’s most valued employees quit, spurred 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. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees.

Then potentially the worst blow of all: Less than two weeks after the announcement, Mr. Price’s older brother and Gravity co-founder, Lucas Price, citing longstanding differences, filed a lawsuit that potentially threatened the company’s very existence. With legal bills quickly mounting and most of his own paycheck and last year’s $2.2 million in profits plowed into the salary increases, Dan Price said, “We don’t have a margin of error to pay those legal fees.”

It wasn’t just good, experienced employees who had a problem with the plan. So did at least one employee who was a recipient of a huge raise:

Via: Canada Free Press

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Hillary Charged Kids’ Charity $200,000 For Speech

Hillary Clinton charged a kids’ charity $200,000 to speak — and she pocketed every dime.

Clinton reportedly charged the Boys and Girls Club of Long Beach $200,000 for a speech earlier this year, according to new speaking disclosures made available on the Clinton Foundation website.

Clinton spoke at a Boys and Girls Club of Long Beach fundraiser in California on March 3, reportedly speaking to 300 Long Beach “movers and shakers” at an event that was closed to the press. The event was marked by Secret Service security and bomb-sniffing dogs outside before Clinton got there.

The Boys and Girls Club of Long Beach’s programs promote character, education, health, and sports and art involvement for children.

When former Secretary of State Condoleeza Rice spoke to the same group in 2009, she reportedly donated the nearly $60,000 they paid her back to the charity.

Via: The Daily Caller

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900,000 — Not 500,000 — Californians to Lose Health Insurance

My wife, San Francisco Chronicle columnist Debra J. Saunders, caused quite a stirover the weekend when she discovered that 500,000 Californians would lose their health insurance under Obamacare. That means often paying more to buy a new policy, on the exchange.

It’s actually worse than she first thought. At an editorial-board meeting yesterday, she questioned the head of Covered California about the matter. He admitted the actual number is between 800,00 and 900,000.

And that got me to thinking about Ross Douthat’s recent blog about Obamacare that I found disturbing because he seemingly accepts the premise that the Technocracy should choose winners and losers:

But not every form of “asking some people to pay more” is created equal. A cap on the tax break for employer-provided health insurance, for instance — which is central to most right-of-center health care proposals, and is taking effect in a more limited way in the form of Obamacare’s so-called “Cadillac tax” on expensive insurance plans — basically asks people who have been getting a very good deal from current health care policy (the well-off and upper middle class, and some union members with generous benefit packages) to live with a somewhat smaller subsidy and somewhat less generous employer coverage going forward. . . .
This policy change isn’t cost free, and it would still violate President Obama’s unwise “if you like your plan, you can keep it” pledge. But it promises to level the health-insurance playing field somewhat while asking the most from those Americans who have benefited from its existing tilt. But “rate shock” seems different, because premium increases in the individual market creates a set of Obamacare losers within a group of people who weren’t obviously winners to begin with.

Via: NRO
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$17,000,000,000,000

President Obama boasted last week that he had signed legislation to lift “the twin threats” to our economy of government shutdown and default. But what was done to fix the problem of growing debt that leads Washington to repeatedly raise the debt ceiling?

Nothing. In fact, by Friday, the U.S. debt had rocketed past $17 trillion.

What does this mean?

• At $17 trillion, this number has passed total U.S. gross domestic product (GDP), the measure of all that is produced in the economy.
• Since Obama took office, the national debt has increased from about $10.6 trillion to more than $17 trillion—a 60 percent increase.

How quickly Obama changed his tune when he transitioned from Senator to President. Here’s what he said just a few years ago:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. (Senator Barack Obama, March 16, 2006)

Via: The Foundry

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