Company that set a minimum wage of $70,000/year facing some unexpected consequences

The left championed Gravity Payments CEO Dan Price as a hero in the war against income inequality, but a few months after setting a minimum wage of $70k his business has encountered some unexpected problems. Well, unexpected if you don’t have any comprehension as to why socialist principles have categorically failed throughout history. It turns out that if you give the least skilled people at your company a huge pay raise, the highly skilled employees who carry the burden of getting the work done won’t be too happy to get nothing.

Start listening at 1 hour 23 minutes into today's podcast:

Below is a rush transcript of this segment, it may contain errors:

STU: Someone else who had a pretty good business was Dan Price. Dan Price is 31 years old. CEO of a company. This is a company that does like internet transactions as far as like, you know, you're paying for things.

JEFFY: Online purchases.

STU: Like a PayPal type of thing. So he decided because he believes in what the left says about income inequality. Decided to change the structure of his company. He's CEO. Making a billion bucks a year. A bunch of people were making way less than that. Is that right? He says no. So he took a giant pay cut and brought himself down to $70,000 a year. He also at the same time decided to pay all of his employees at least $70,000 a year because, you know, income inequality. It's not about the job you're doing or how well you're doing it. Just everything needs to be income no matter what.

JEFFY: Right.

STU: So this was a big story. The New York Times picked it up. It was a -- it was a cause of the left for a couple of weeks. Now, what doesn't happen with those causes of the left is no one ever follows up on them. This time we'll give credit to FoxNews.com for doing so. They decided to call up Dan Price a few weeks later and say, hey, Dan, you had that company doing well and you decided to turn it into an example of socialism. How is that going for you? Working out well? Everything going great? Is that what we would expect? Well, he says, I'm working as hard as I ever worked to make it work. I'm renting out my house right now to make ends meet myself. This is with -- he's talking about the difficult struggle. However, the problem is, a lot of the good employees have left.

JEFFY: Yeah, they were kind of pissed, which is what we said.

STU: See, the new employees who were not doing as much work or not as high level in the company are making the same now as the people who have been there for a while and have built the company, which is kind of crazy.

He gives raises to people who have the least skills and are the least equipped to do the job. And the ones who were taking on the most didn't get much of a salary bump. This is from the financial manager. Mazy McCaster. She's 26. She said when she talked to Price about it, he treated her as if she was being selfish and only thinking about herself. That really hurt me, she said. I was talking about not only me, but everyone in my position. Approaching burnout, she quit.

Grant Morgan, 29, also quit saying the new pay scale was disconcerting. Now the people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members.

Price, now, this is the guy who is the boss, said both of these guys -- and also Rush Limbaugh and other talk show hosts who were critical of this, were not wrong. There's no perfect way to do this and to handle complex work issues that doesn't have any downsides or tradeoffs.

So he's now losing his good employees. He's keeping the old employees at inflated rates, and he's having major problems with his company. And there's a reason for that. Socialism doesn't work. It's not a system that ever worked.

JEFFY: He lost some of his clients as well over this transition. Some employees were wound up that if they were willing to do that, then maybe something else was wrong and they weren't going to get the service that they had been getting in the future.

Now he claims to have gotten new clients because of this. But that has not paid off yet.

STU: No, because those clients are like, you know what, we don't think it's right for us to be paying for these services. They should be free to everyone. We won't send in any payments. But they're new clients.

JEFFY: He's really struggling. And he's struggling with his brother who helped him start the business. Now he's phased out the brother. And the brother is like, I'm worth a little bit more than 70,000-dollar thing. I need a piece of the pie.

STU: Yeah, you'll notice that this doesn't happen in the businesses that liberals usually run. I'll give Dan Price a lot of credit here. You know, he's actually implementing these policies that you normally only see implemented by someone named Jong-il.

JEFFY: He seemed to think -- he didn't do it -- according to the story, when I read the latest catch-up story, he didn't do it, he claimed, because of the il factor. He just, you know, felt like he saw something that somebody was struggling. He heard one of his employees struggling about some sort of school or something. Gosh darn it.

STU: He did address the income inequality part of it though. Look, there's nothing wrong with believing that. This guy actually put it into practice. The left -- for example, Obama complains about women not being paid the same and then doesn't pay women as much as men in his own administration. Hillary Clinton, the same thing in the campaigns. We've see this over and over and over again. And it's really annoying. At least this guy is trying. The best that can happen -- is why we like federalism is that you can do these things. Test them out. We can all watch someone else fail at them. And then we can decide to do the right thing. That's what's good about this country. I'm all for this guy giving this a whirl. There's a lot of companies that try crazy things like that and they usually don't work. Everyone wants to come up with a new way of running the business. Because everyone else is so stupid. And they don't understand. And they're stodgy. And stuck in their old ways. A lot of those old ways work and they do something. That doesn't mean you constantly go on with the exact same process forever.

JEFFY: But we watch other companies grow and succeed and fail. And that's the way we learn. I mean, we learn that children should not put signs in front of their house to sell worms. It's illegal. Don't do it. Don't try to sell your product with a sign, kid.

Far away fields are always greener.

It is easy to look at someone else's life or another country and wish you were more like them.

Americans can be guilty of this. It could be Bernie Sanders wishing America was politically more like Sweden or other European socialist countries. It could be an American who finds out I'm Irish, been trying to move to America for over 17 years, and thinks, "Oh Jonathon, Ireland is a lovely free country - stay there. America has problems right now. You would not like it here."

Today, I want to take you on a journey and compare our nations' attitudes toward Coronavirus and the policies currently in place for "our protection."

I would also ask you to imagine you were in my shoes. Ask yourself which country you would want to live in.

Role of Government

Before discussing restrictions, it is critical to understand the very different governmental systems within our two countries. America is blessed to have a federalist system where states have considerable control over what happens in their states. DC, in theory, holds very little power.

Ireland is the exact opposite. We are a democracy with a big centralized government. The vast majority of power lies with our Taoiseach (Prime Minister) and his cabinet. Local states have no control, as our restrictions are countrywide.

America
  • America's restrictions vary from state to state. You will find the majority of businesses are open but operating with some restrictions.
  • Churches, malls, retail, gyms, cinemas are mostly all open.
  • Bars and restaurants are open but usually at a reduced capacity.
  • Schools have moved to online learning.
  • No travel limits.
  • Travel between states is allowed, but some states like Alaska require a negative Covid test.
  • Guests are allowed in homes, but some states have a limit (but not enforced).
  • Masks are either advised or mandatory in different states.
  • Social distancing is required.

When researching this article, the most prominent complaints were restrictions on visiting loved ones in hospitals and nursing homes. These restrictions have upset many people because you have a proud history of believing in individual freedoms. The government is not your parent and does not have a right to tell you how to live.

Now let me introduce you to Ireland.

Ireland

Ireland is currently on the highest level of lockdown possible and has been since Christmas Eve. We are officially on lockdown until March 5th, and our lockdown is getting more severe. Our government has already confirmed lockdown will be extended until After Easter.

Ireland has a stay-at-home order in place, and you are to work from home where possible.

  • "Essential" retail is open but with stupid rules. Some of our shops are half-open and half-closed. Imagine a Walmart that is allowed to sell food, but large parts of the clothing section are closed because they are not deemed essential.
  • Non-essential retail is now fully closed. At the start of lockdown, outlets were allowed to offer a click-and-collect service – but that has now been banned.
  • Gyms and cinemas are all closed. Ø Bars and restaurants are closed and unlikely to re-open until mid-summer.
  • Schools have moved to online learning.
  • No guests are allowed in homes or gardens.
  • Masks are mandatory and with fines.
  • Social distancing is required.
  • Churches are allowed to open for private prayer, but the mass is strictly online. This has caused a lot of distress for families. Ireland is a Catholic country. I know many older people who have not received communion since last March. My mother is a funeral director and has witnessed the pain caused to families, as only ten people are allowed to attend a funeral, regardless of the Church's size. Imagine a large family deciding what ten people can attend? How do you choose that? Sadly, the Irish Church is spineless and accepts every rule the government passes.
Additional Tyranny

Very few businesses are open right now, but that is not the end of the restrictions. There are limits on how far you can travel. I am currently off my work because of Coronavirus restrictions. There are two legal reasons I can leave my house: personal exercise/walk the dog and to purchase food/essential items from the store. These activities must be completed within three miles of my house.

My human right to privacy has also been crushed. If I decided to get in my car tomorrow and just drive, I would encounter several police checkpoints where I would have to disclose where I live, where I am going, and the purpose of my trip. If the trip is not essential, I will be told to return home and likely given a fine.

Tyranny North Korea Style!

Most countries have border controls, all with similar intent: control who enters the nation, set how long they can stay, and mandate what they can do.

The one exception to this rule is North Korea. Their intent is not to control who enters. Instead, they seek to ensure no one leaves and defects to the South.

As you can imagine, life in Ireland is not exactly pleasurable with the above restrictions. This is especially the case for people like me who suffer from severe depression and are desperate to escape.

If tomorrow I woke up and decided I want out (which I very much do) and found a country I could enter legally, I AM NOT ALLOWED TO LEAVE.

The Irish government has deemed all international travel is not essential and has placed police at all our ports and our airports. If I attempt to go to the airport, I would be greeted at a police checkpoint outside the airport, told my journey is not essential, and sent home with a fine. Currently, the fine is €500 ($600). New legislation is being discussed in parliament to increase the penalty to €2,000.

The police have new powers for people who get past the checkpoints and continue to travel overseas. When they return to Ireland, they can be sent to jail for a month. They will also have a criminal record – that record would likely disqualify the person traveling to countries like America and Australia.

Irish People

I could talk to you all day long about why America is unique and exceptional. There are so many different reasons. One of the reasons is your people, and I highlight Alexis de Tocqueville's sentiments, who said, "America is great because Americans are good." Americans have this rebellious streak in their soul, and it can be traced all the way back to the Pilgrims on the Mayflower. This great spirit is based on being an independent sovereign individual and wanting to live life to the fullest and not be stopped or controlled by ANY government.

Irish people are good and decent. However, they do not share the same characteristics. They believe and support government control because it is all they have ever known.

If you ask the average Irish person about the current government, he will likely tell you he dislikes one of the parties involved or an individual leader. Yet, ask that same person what he thinks about the restrictions, and he will defend them. I hear some say they believe the government has not done enough.

On the rare occasions that people break restrictions, the most significant backlash will likely come from the community, as they brand those people selfish and irresponsible.

Going Forward

The damage from Covid is going to be around forever. Our actions have caused damage to our mental health and the economy (with businesses closing and jobs lost). This will cause poverty. This is made worse by governments' reckless spending and borrowing of money we simply do not have.

However, I would argue we have a much bigger problem stemming from Covid: social acceptance of governmental control in a "crisis."

When a government is powerful enough to compel someone not to leave their house, define their job as non-essential, or tell someone they can't hug their grandparent, what exactly is off-limits? What control or power is a line government won't cross for the "common good"?

Most importantly, do you think governments worldwide will fix this issue and give back the powers they have taken? Or is it more likely we will just move onto a new crisis – maybe climate change or the Great Reset?

This is why the world needs America. We don't need the American military to intervene and save us.

We NEED America to rediscover why you are an exceptional nation. We NEED you to be the statue of liberty shining out the beacon of light, hope, and freedom for the world where your actions remind all of us what is possible when we unleash the energy and individual genius of mankind. If we work hard to reapply these principles, we can take another 5,000-year leap forward together.

Writers note: The policies listed here are based solely on Ireland. However, you see very similar restrictions in England and throughout Europe.

Jonathon Dunne is a keynote speaker, weekly podcast host on Blaze Media, and published author on major platforms such as The Blaze, Glenn Beck, Libertarian Republic, Western Journalism, and Constitution. Since 2012, he has reached millions with his message of American exceptionalism.

You can find him on social media – Facebook, Twitter, MeWe

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