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The New York Times had a fascinating story yesterday about Dan Price, the CEO of credit card processor Gravity Payments, who made news last April when he decided to cut his million-dollar salary to $70,000 a year so he could give raises to a number of his employees that would, in essence, make $70,000 a year the minimum wage at Gravity.

It has not all turned out as he would have hoped.

"The move drew attention from around the world," the Times writes, "including from some outspoken skeptics and conservatives like Rush Limbaugh, who smelled a socialist agenda — but most were enthusiastic. Talk show hosts lined up to interview Mr. Price. Job seekers by the thousands sent in résumés. He was called a 'thought leader.' Harvard business professors flew out to conduct a case study. Third graders wrote him thank-you notes. Single women wanted to date him."

The story goes on:

"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."

And yet, Price - who has a conservative religious background (not a Socialist one) and seems to be rooted as much in values-and-faith as in politics - seems to be convinced that his move has the potential to create a revolution.

You can read the entire, fascinating story here.
KC's View:
I feel bad for the guy, though it sounds like maybe he brought some of this on himself by bring perhaps a little too aggressive in how he positioned the decision and presented it to the public. I still think it is nonsense to label it socialism, especially when you get a sense of the conservative religious values that seem to inform much of his thinking, even if he's not very religious anymore.

What Price did was deliver a shock to the system ... and in doing so, he left himself open to criticisms from a variety of places, which then turns into a self-fulfilling prophesy when his business starts to be hurt be his decision.

I still think he had the best of intentions, though he might've been more judicious in how he changed his company's policies. And I think his general premise - that income inequality is creating economic and social problems in this country - is a sound one. it's just that his prescription for how to fix it didn't work as well as he would've liked. But I give him credit for being willing to try something different and put himself and his company on the line.