Name:	MartiniMan -	Reply
Subject:	$70K minimum wage
Date:	4/17/2015 11:49:04 AM

Will be an interesting experiment by a small company out of Seattle. Their CEO has announced that the lowest paid employees in the company will make $70K per year.  Apparently he read some article that indicated that was the income where people were happiest or some such stuff.  He is going to take a pay cut and devote 80% of the company's profits to the wage increases. 

More power to him if he wants to go this way and it is pretty obvious he has no other shareholders because if he did they might be a tad upset.  I suspect it will cause all sorts of dissension when the receptionist makes as much as other employees that have more stress, duties, responsibilities, etc. and wonder why they aren't being paid a lot more.  One thing I know for sure is he will not lack for resumes from lower level employees who will be looking to cash in.

I suspect that some time in the future there will be a quiet announcement that he is abandoning his experiment due to all sorts of unexpected consequences.  That news will be very challenging to find.

Name:	HARRY -	Reply
Subject:	$70K minimum wage
Date:	4/17/2015 12:53:45 PM

70K will be the minimum,not across the board is the way I understood it but I do see your point.

Name:	MartiniMan -	Reply
Subject:	$70K minimum wage
Date:	4/17/2015 1:17:43 PM

That is my understanding as well.  To me though, if some receptionist makes $70K and I have a lot of other responsibilities and stress and only make $80K because that is the market value of my position I am going to expect to be paid more.  I am doing more, I am contributing more, I am way more valuable to the company than the receptionist and so on.  So even though most people in my position only make $80K (which is double what they pay their receptionsist) then I should get double what they pay the receptionsist, right?  So now instead of having to just pay the low end people $70K they will also have the others asking for more money because they contribute way more to the success of the company than a lowly receptionsist.  

Again, this may all work out fine for him but given my 25 years owning a business I am skeptical.  If you watch closely he will soon enough be trying to put that genie back in the bottle.  Could spell his doom.

Name:	Talullahhound -	Reply
Subject:	$70K minimum wage
Date:	4/17/2015 1:56:30 PM

I believe the basis of his decision were studies that have indicated that $70K a year is considered a "living wage", i.e. that which a person can actually live on.  I don't recall if you mentioned that he, as CEO,  is taking a very significant pay cut to achieve this.  I also don't recall what other benefits his employees are getting, like health care or vacation time.  One thing is for sure - the turnover will no doubt be very low for his clerical/administrative staff.  I have found it is a lot easier to hire a new engineer or other professional than it is to hire really good clerical/administrative staff.  Doubt the model would work for every company, but if his company can afford it and he wants to do it, why not? 

Name:	MartiniMan -	Reply
Subject:	$70K minimum wage
Date:	4/17/2015 3:33:18 PM

I have seen various reasons for him picking that number but I think his quote was about happiness or satisfaction.  Either way, it will be an interesting experiment and I am glad he is doing it with his shareholder's money and not mine.  As I said, he is free to do what he wants but I suspect he will quietly try to fix this error once he sees how human nature responds.  Then again, he may be on to something. I could never do it in my business because the most any client will pay for amdinistrative support is $55 per hour.  At $70K that would leavel me around $20 per hour to pay for benefits, g&a, etc. and I would quickly go out of business.  We'd lose money on every hour and not even remotely be able to make it up in volume.

Name:	Talullahhound -	Reply
Subject:	$70K minimum wage
Date:	4/17/2015 6:15:34 PM

Believe it is a privately held company.  No shareholders or Board of Directors.  Also believe we are talking about Washington state or somewhere in the tech belt where salaries tend to be higher than in GA or AL.