{"id":6591,"date":"2015-04-15T17:20:46","date_gmt":"2015-04-15T17:20:46","guid":{"rendered":""},"modified":"2015-04-15T17:20:46","modified_gmt":"2015-04-15T17:20:46","slug":"ceo_buys_short_term_love","status":"publish","type":"post","link":"https:\/\/admin.rushlimbaugh.com\/daily\/2015\/04\/15\/ceo_buys_short_term_love\/","title":{"rendered":"CEO Buys Short-Term Love"},"content":{"rendered":"

\"Listen<\/a><\/p>\n

RUSH: Dan Price is the founder of a company called Gravity Payments in Seattle. He has 120 employees and he has decided he\u2019s gonna raise the minimum wage at his company to $70,000. He\u2019s going to slash his own salary to $70,000. It\u2019s gonna happen in the next three years. He\u2019s also going to require himself to plow up to 80% of the $2.2 million in profits back into salaries. If there are profits, they will go to salaries, not growth of the business, not research and development, none of that. It\u2019ll go right, 80% of the profits will go to salaries. <\/p>\n

He says he was inspired to make this step after reading that happiness increases dramatically for people earning over $70,000 a year. Again, his name is Dan Price, CEO of Gravity Payments, slashing his own salary 93%. This is a Seattle startup. He has instituted a $70,000 minimum wage at his credit card processing company. That\u2019s what the business is. Credit card processing company, and he is paying for it by slashing his $1 million salary to the same as his lowest-paid worker, and 80% of the firm\u2019s $2.2 million in profit, expected profit, expected, projected, they haven\u2019t earned it yet, 80% of the 2.2 million on paper profit is going to be plowed back into staff salaries. <\/p>\n

“Over the next three years, Gravity Payments will offer at least $70,000 salary to all of its 120 employees — even the most junior customer service representatives and clerks, CEO Dan Price told the New York Times <\/a>this week. ‘Is anyone else freaking out right now? I\u00c2\u2019m kind of freaking out,\u2019 he told his cheering employees at a meeting on Monday afternoon. The policy will raise the wages for 70 of the company\u2019s workers – more than half the staff. The Times was present at Price\u2019s announcement. Even if the $70,000 minimum wage is a publicity stunt, it\u2019s one that will cost him big time,” because he\u2019s having to slash his own salary 90% to make this happen. <\/line><\/p>\n

And, again, he read that people\u2019s happiness increases dramatically for people when they are earning at least $70,000 a year. Now, I hope that this company in future years — (interruption) what are you shaking your head at in there? What, you don\u2019t think it\u2019s gonna work? (interruption) Well, I know, no, he doesn\u2019t know the Thanksgiving story<\/a>. He doesn\u2019t know, he obviously doesn\u2019t. He is a good liberal, and he\u2019s read that people are happy at 70 grand. What he doesn\u2019t understand is, happiness does not equal productive. Happiness equals comfort. “Seventy grand, well, I can stop working hard,” is what it means. <\/p>\n

Anyway, he\u2019s not tying this to anything other than employment. He\u2019s not tying it to performance. He\u2019s not tying it to sales. This is pure, unadulterated socialism, which has never worked. That\u2019s why I hope this company is a case study in MBA programs on how socialism does not work, because it\u2019s gonna fail. My guess is that just like when Solyndra went south, there will not be a story on Gravity Payments succumbing to gravity and going under. <\/p>\n

Now, somebody sent me a note on this story, said, “I was reading some of the comments under this story at Facebook, and I was stunned at the vast majority of comments on Facebook who think this guy is just great and has such a big heart, and thank God there\u2019s a nice CEO left in America.”<\/p>\n

And I\u2019m saying, “Why are people surprised? Why are you surprised that that would be a reaction in a country that\u2019s moving toward socialism? It makes all the sense in the world that people commenting on Facebook would think this is great and want to get in on it.” The surprising thing to me — I wish it were true — would be if a whole bunch of commenters started posting reasons why this is doomed, why it can\u2019t possibly work. And remember, it\u2019s a startup. They haven\u2019t made any profit yet. It\u2019s all projected. <\/p>\n

He\u2019s chosen $70,000 as an arbitrary salary because he read that\u2019s where people are happy. And he\u2019s gonna find out — (laughing) — it isn\u2019t gonna take long because once everybody figures out they\u2019re all making the same, no matter what they do, the slackers are gonna surface. Human nature. William Bradford found out during the early Pilgrim days in this country. The slackers, the first thing they do is slack off when they find out that everybody\u2019s being paid the same. And then if the guy sets up an incentive program where some people start to make more, that\u2019s the beginning of his troubles, because he has set this up as everybody\u2019s gonna be the same. <\/p>\n

So if somebody gets a $10,000 raise everybody better or there\u2019s gonna be hell to pay. And if he ever makes more than $70,000 himself, all these people praising him to the end of the world on Twitter and Facebook are gonna come for him with the long knives, accusing him of being a hypocrite. It\u2019s probably a publicity stunt here, even though everybody involved is denying that. But the idea that people would not think this is a great thing, in this country, in this day and age, the way things are trending, particularly on social media, makes perfect sense.<\/line><\/p>\n

BREAK TRANSCRIPT<\/p>\n

Okay, we\u2019ve got sound bites from the CEO. If you\u2019re on hold, hang on, be patient, coming right back to you. Dan Price was on the Fox Business Network this afternoon with Stuart Varney. This is the guy that established a new minimum wage of $70,000 for every employee. The business is in Seattle and Varney says, first sound bite, “Are you a socialist?”<\/p>\n

PRICE: I\u2019m not a socialist. What I really want to do, I want to have purpose, right? What I love about my work is I have a purpose every day. I\u2019m passionate about independent businesses, saving them money, giving them good payment processing services and my team members are, too. But sometimes, if you\u2019re a little bit below what it takes to scrape by, that can be distracting from that passion, from that purpose that you have for what you do. So I\u2019m all about achieving at the maximum amount, but I want to remove those distractions and basically help people move forward.<\/p>\n

RUSH: Okay. Let me tell you what he\u2019s doing here. I know exactly what this guy is doing, and that\u2019s why I know exactly what\u2019s gonna happen. The key to this sound bite, “If you\u2019re a little bit below what it takes to scrape by, that can be distracting from your passion.” So he\u2019s assigning the same passion to his employees that he has, but they don\u2019t make enough money. He\u2019s read that $70,000 is that liberating magic number you become happy, and he wants people to be able to focus on the work, not on they can\u2019t pay the light bill, they can\u2019t pay whatever bill. So he\u2019s gonna pay \u2019em 70 grand so they don\u2019t have to worry about making their payments. They have to worry about being in debt, and they can focus on their passion, which is his business. <\/p>\n

And you can do that with one or two, but not every employee is the same. You can do that now and then, that can work for a time. But I think what the guy\u2019s doing is trying to buy love. Myself, I think the guy\u2019s trying to buy respect, trying to buy affection, that never works, by the way. Here\u2019s the next bite. Stuart Varney says, “Terrific idea. You know, I think you\u2019re an extremely generous person. You make a million dollars a year so you\u2019re gonna take a pay cut down to $70,000 a year, and you\u2019re taking some money from your profits, and you\u2019re gonna chuck it all into the big pot so that everybody makes $70,000 minimum. You\u2019re gonna take some of that profit and turn it back into salaries, not growth of the business, and you think you\u2019re gonna get a good return on your investment?”<\/p>\n

PRICE: Absolutely. And I actually think that the way we look at it is about trust and it\u2019s about values. So when you take care of people, they tend to take care of you. And about a year and a half ago we instituted unlimited vacation for all of our team. And sure enough, productivity went up. Paid time off, even though it\u2019s unlimited, didn\u2019t really go up. When you trust people, they really take care of you. There is also a moral imperative of as leaders to try to do the best we can for everybody, and I think if we step up and take these problems seriously, there will be less need for politics to be involved.<\/p>\n

RUSH: Okay, now let me translate this for you. It\u2019s about trust and values. When you take care of people, they tend to take care of you. For a while, that will be true, for a while. Don\u2019t know for how long, depends on the individual. It\u2019s gonna be different for every employee. For a while they\u2019re all gonna appreciate it, but it isn\u2019t gonna take long before the appreciation dries up and the expectation settles in, and it doesn\u2019t take long at all for the appreciation to vanish. He\u2019s going to learn that he\u2019s not going to be the beneficiary of a lot of appreciation for a very long time. If that\u2019s what he\u2019s trying to buy. <\/p>\n

I read about this unlimited vacation. They set up unlimited vacation time for everybody, and you were on your own, whenever you wanted to go on vacation, for however long, go do it. You know what they found? Nobody took vacation. They were afraid of being singled out as not being hardworking. They were afraid somebody else would come in, I don\u2019t know if it was at this company per se, but I\u2019ve seen this in other companies where they instituted this policy of no defined vacation time, no defined sick days. Total honor system, you take your time.<\/p>\n

You want to go on a month vacation, you do it. There weren\u2019t any limits. You need to take next two days off because you\u2019ve got a sick pet, you go right ahead and do it. And they found that people took hardly any sick days, and the number of days people took for vacation fell dramatically. <\/p>\n

Now, some said that was good. It added to productivity because people take way too much time off anyway, and they don\u2019t need that much time off, and this was good. Whatever it was that kept \u2019em on the job, whether it was guilt or fear that they would lose the job, somebody else would come in and do their job while they were gone and it would be demonstrated they weren\u2019t needed, whatever it was, they didn\u2019t take their vacation. <\/p>\n

Then, of course, the human resources people started speaking out and said, “That\u2019s not fair. You are being mean to your employees. You think you\u2019re treating them well by telling \u2019em they\u2019re on the honor system, but look at them, they\u2019re not taking any time off and you end up running a sweatshop.” So the pressure was then brought to bear to reinstitute a very specific vacation-and-sick-day policy so that people would indeed get some time off, because, left to their own devices, they wouldn\u2019t. <\/p>\n

In other words, honor system vacation, take as much, whenever you want, just give us a couple days\u2019 notice and you\u2019re free to go. Same thing with sick days. It did not lead to more productivity. It led to people being scared. It led to people being afraid. It did not liberate people. It imprisoned them, attitudinally. <\/p>\n

It\u2019s kind of like in the NFL during organized team activities, the OTAs in the spring, they\u2019re voluntary, except if you don\u2019t show up, you hear about it. If you don\u2019t show up, you may not start. They\u2019re voluntary by terms of the collective bargaining agreement. But everybody expects you to be there. So “voluntary” is just thrown in to make it look good, but everybody knows the game. There\u2019s nothing voluntary about it. <\/p>\n

If you really want to stay on this team, if you really want to stay in the good graces of the coach, you will show up. That\u2019s how you prove that you care, by volunteering to be here when you don\u2019t have to be, and that\u2019s sort of a takeoff on this. There\u2019s another aspect, one more thing here before we go to break. “When you trust people, they really take care of you.” <\/p>\n

See, there\u2019s a moral imperative of us as leaders to try to do the best we can for everybody. Now, in one sense you could say that this guy is trying something different, like Obama is in American foreign policy. For 50 years we\u2019ve had a policy with the Middle East Peace process, he\u2019s gonna do something different. Fifty years we\u2019ve been trying to keep Cuba and our policy with Cuba being specifically defined and, in Obama\u2019s eyes, it hasn\u2019t worked, hasn\u2019t accomplished anything in his eyes, so we\u2019re gonna change it. And virtually everything about America that has been a tradition, Obama says, we\u2019ve been sticking with this, various tax cuts here and various policies over here, and isn\u2019t working. So I\u2019m just gonna shake it up. I\u2019m gonna do everything differently. You see where we are. <\/p>\n

This guy is suggesting here, “You know what? I don\u2019t have to run my company the way the book says. I don\u2019t have to run my company the way everybody else says it should be. I don\u2019t have to run my company the way experience has taught other managers to run theirs. I\u2019m gonna do it a different way. I\u2019m gonna try it. What have I got to lose? It\u2019s my company.” So applaud him for that. That\u2019s fine and dandy. <\/p>\n

I think that he\u2019s going to learn that there are certain characteristics of human nature that are gonna happen here. Listen to why he\u2019s paying people 70 grand. He\u2019s not paying them 70 grand specifically because they\u2019ve earned it. He\u2019s paying them 70 grand because that\u2019s what he read will make them happy. What if it doesn\u2019t? <\/p>\n

He\u2019s also decided that since they don\u2019t make 70, they\u2019ve got a bunch of distractions because of their financial circumstances. They can\u2019t, maybe, pay the phone bill or the credit card debt is monumental and escalating or whatever, and he wants to rid those distractions so that people can focus on their work. <\/p>\n

That\u2019s an admirable trait, by the way. That would be wonderful if it worked. But then at some point basic human nature 101 is going to appear, and if you decide to pay people because you want them to appreciate you, they will for a time, but it\u2019ll vanish and after a while 70 grand isn\u2019t gonna be enough. I\u2019ll even make a prediction that after a while some of these employees are gonna say that this was a trick to get them locked into 70 and no more. <\/p>\n

He\u2019s gonna find all kinds of reactions to this. He\u2019s hoping that every employee is profoundly impressed and blown away by the generosity and has never-ending appreciation and therefore will work themselves as hard as it takes to get the job done, and for a while that\u2019ll happen. But then it won\u2019t take long before that naturally goes away. <\/p>\n

You can\u2019t spend the rest of your life appreciating somebody. It doesn\u2019t happen. Be nice if we did, but we don\u2019t. After awhile you take it for granted. After awhile it becomes an expectation and then becomes an entitlement and then it becomes not enough and then it maybe is a trick to keep us from ever having to earn a hundred. Seventy thousand is where he\u2019s heard we\u2019re gonna happy. He gave us 70 grand, that\u2019s supposed to solve all of our problems, but a year or two from now what if I want 75?<\/p>\n

No, 70\u2019s the magic number. You\u2019re gonna have all kinds of theories abound from his own employees. Human nature is what it is. I\u2019m just here to tell him that the mass appreciation that he hopes, that he wants, is not going to be what he remembers as the result of his little experiment. <\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: Let me give you a couple other examples of what\u2019s gonna happen to Dan Price, the CEO of this company Gravity Payments. He\u2019s paying everybody 70, the theory being that\u2019s what he heard is the number that makes everybody happy. It isn\u2019t gonna make everybody happy. Some people, 70 grand isn\u2019t gonna cut it. Since he said that the purpose is he wants people free from distraction, he\u2019s gonna have some people come to him on the sly: “I really need 80, man.” And he\u2019s gonna say no, \u2019cause everybody\u2019s getting the same 70 and he\u2019s gonna have a disgruntled employee. <\/p>\n

“I need that to avoid the distractions you were talking about. I need that to pay the bills that I\u2019ve got.” <\/p>\n

“Sorry, man. Everybody 70, including me.” Bye-bye appreciation, and hello anger, because now he wasn\u2019t being truthful. He said he\u2019s paying them this money so they would be liberated from distractions. <\/p>\n

“Well, my distractions cost me $90,000 a year. I need $90,000 or I can\u2019t work with a spirit and free mind.” <\/p>\n

“Sorry, man, 70\u2019s it.” That\u2019ll take maybe a couple weeks. But let\u2019s say that he did pay the guy 90. Let\u2019s say one employee comes to him and makes the case, “Look, man, I need 90. I know you\u2019re paying everybody 70, but I need 90,” and he gives this sob story, maybe about divorce, kids, whatever. And the CEO falls for it, “Okay, okay, I\u2019ll give you 90.” He thinks he\u2019s really bought some appreciation now. Nope. Next year the same guy will be back wanting another 20. It\u2019s never enough, no matter what, no appreciation, never enough. <\/p>\n

There\u2019s always gonna be one person on his staff that\u2019s gonna be that way, because people are different. When that starts to happen, if people get wind, if he does give people more than 70 and people get wind of it, hello fallout. And if none of this is merit based, that\u2019s the beginning of the problem here. And it sounds like it\u2019s appreciation based. <\/p>\n","protected":false},"excerpt":{"rendered":"

RUSH: Dan Price is the founder of a company called Gravity Payments in Seattle. He has 120 employees and he has decided he\u2019s gonna raise the minimum wage at his company to $70,000. He\u2019s going to slash his own salary to $70,000. It\u2019s gonna happen in the next three years. He\u2019s also going to require […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","ngg_post_thumbnail":0},"categories":[],"tags":[],"yoast_head":"\nCEO Buys Short-Term Love - The Rush Limbaugh Show<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/admin.rushlimbaugh.com\/daily\/2015\/04\/15\/ceo_buys_short_term_love\/\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:title\" content=\"CEO Buys Short-Term Love - The Rush Limbaugh Show\" \/>\n<meta name=\"twitter:description\" content=\"RUSH: Dan Price is the founder of a company called Gravity Payments in Seattle. 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