How's that working out for you?

I was wondering when we'd here about this in some kind of anniversary "Where is he now?" thing. But it turns out that it has only taken three months for the idealistic Dan Price and his credit card processing company, Gravity Payments, to reap the "benefits" of over-paying staff members. Excerpt:

Gravity Payments financial manager Maisey McMaster didn’t pull any punches in her critique of her former boss:

“He gave 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 bump,” she said.

Another former employee, Grant Moran, echoed a similar sentiment:

“Now the people who were just clocking in and out were making the same as me,” he said. “It shackles high performers to less motivated team members.”

Dan Price’s own brother Lucas, who owns 30 percent of the company, even filed a lawsuit, seeking millions of dollars in damages.

According to Dan Price, his experiment in wage distribution has made him ill-equipped to handle it:

“We don’t have a margin of error to pay those legal fees,” he said.

The company has also lost customers, who were displeased with the decision. Price finally relented, admitting that, perhaps, raising the minimum wage at his company to $70,000 wasn’t the best idea:

“There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs,” he said.

I skipped the part about his reducing his "salary" from $1 million to $70,000 because that is a silly red herring of a thing to say about a business owner. But these problems shouldn't surprise anyone who understands economics. When I first heard about this on Limbaugh's show my initial thought was "$70,000? Why not $80,000?? What a cheapskate."

If the world was perfect, these kinds of company problems would never happen. But if the world was perfect we wouldn't need credit card processing either, would we.