One Seattle company just set its minimum wage at $70,000 a year

Seattle&#039;s Gravity Payments will pay each of its employees $70,000 a year, minimum

(Image credit: Facebook/GravityPayments)

last updated 14 April 2015

On Monday, Dan Price gave his entire staff at credit-card processing company Gravity Payments a raise. Even the most junior of his 120 employees will soon earn $70,000 a year, minimum, Price told his staff, to loud cheers. "Is anyone else freaking out right now?" Price said after dropping that bombshell, according to The New York Times. "I'm kind of freaking out." Currently, the average salary at Gravity, located in Seattle, is $48,000.

Price says he will pay for raising most everyone else's salary by cutting his own to $70,000 a year, from almost $1 million, and by plowing company profits into company paychecks. Why $70,000? Science. Five years ago, Angus Deaton and Daniel Kahneman published a study showing that a person's emotional well-being rises with income up to about $75,000, and suffers the lower down from that number you get. Read more about Price's thinking at The New York Times, or read about the underlying research at the journal PNAS.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.