'In 1965, CEOs in the US earned 20 times more than the average worker but by 2015 it had risen to 300 times (in the UK, the bosses of FTSE 100 companies now earn 117 times the salary of their average worker).''In 2015, the boss of a card payments company in Seattle introduced a $70,000 minimum salary for all of his 120 staff - and personally took a pay cut of $1m. Five years later he's still on the minimum salary, and says the gamble has paid off.
Dan Price was hiking with his friend Valerie in the Cascade mountains that loom majestically over Seattle, when he had an uncomfortable revelation.
As they walked, she told him that her life was in chaos, that her landlord had put her monthly rent up by $200 and she was struggling to pay her bills.
It made Price angry. Valerie, who he had once dated, had served for 11 years in the military, doing two tours in Iraq, and was now working 50 hours a week in two jobs to make ends meet.
"She is somebody for whom service, honour and hard work just defines who she is as a person," he says.
Even though she was earning around $40,000 a year, in Seattle that wasn't enough to afford a decent home. He was angry that the world had become such an unequal place. And suddenly it struck him that he was part of the problem.
At 31, Price was a millionaire. His company, Gravity Payments, which he set up in his teens, had about 2,000 customers and an estimated worth of millions of dollars. Though he was earning $1.1m a year, Valerie brought home to him that a lot of his staff must be struggling - and he decided to change that.
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Before 1995 the poorest half of the population of the United States earned a greater share of national wealth than the richest 1%, he points out. But that year the tables turned - the top 1% earned more than the bottom 50%. And the gap is continuing to widen.
In 1965, CEOs in the US earned 20 times more than the average worker but by 2015 it had risen to 300 times (in the UK, the bosses of FTSE 100 companies now earn 117 times the salary of their average worker).
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After crunching the numbers, he arrived at the figure of $70,000. He realised that he would not only have to slash his salary, but also mortgage his two houses and give up his stocks and savings. He gathered his staff together and gave them the news.
He'd expected scenes of celebration, but at first the announcement floated down upon the room in something of an anti-climax, Price says. He had to repeat himself before the enormity of what was happening landed.
Five years later, Dan laughs about the fact that he missed a key point in the Princeton professors' research. The amount they estimated people need to be happy was $75,000.
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The amount of money that employees are voluntarily putting into their own pension funds has more than doubled and 70% of employees say they've paid off debt.
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Two senior Gravity employees also resigned in protest. They weren't happy that the salaries of junior staff had jumped overnight, and argued that it would make them lazy, and the company uncompetitive.
This hasn't happened.
Rosita Barlow, director of sales at Gravity, says that since salaries were raised junior colleagues have been pulling more weight.
"When money is not at the forefront of your mind when you're doing your job, it allows you to be more passionate about what motivates you," she says.
Senior staff have found their workload reduced. They're under less pressure and can do things like take all of the holiday leave to which they are entitled.
Price tells the story about one staff member who works in Gravity's call centre.
"He was commuting over an hour and a half a day," he says. "He was worried that during his commute he was going to blow out a tyre and not have enough money to fix that tyre. He was stressing about it every day."
When his salary was raised to $70,000 this man moved closer to the office, now he spends more money on his health, he exercises every day and eats more healthily.
"We had another gentleman on a similar team and he literally lost more than 50lb (22kg)," he says. Others report spending more time with their families or helping their parents pay off debt.
"We saw, every day, the effects of giving somebody freedom," Price says.
He thinks it is why Gravity is making more money than ever.
Raising salaries didn't change people's motivation - he says staff were already motivated to work hard - but it increased what he calls their capability.
"You're not thinking I have to go to work because I have to make money," Rosita Barlow agrees. "Now it's become focused on 'How do I do good work?'"
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It took him a few more years to grasp the scale of the problem among his staff.
"Most were too intimidated to come to me and tell me how a lack of pay was hurting them," he says.
Before 2015, he had already begun giving employees 20% annual pay rises. But it was his conversation with Valerie that convinced him to go further.
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Five years later, Price is still on Gravity's minimum salary. He says he's more fulfilled than he ever was when he was earning millions though it's not all easy.
"There's tests every day," he says.
"I'm the same age as Mark Zuckerberg and I have dark moments where I think, 'I want to be just as rich as Mark Zuckerberg and I want to compete with him to be on the Forbes list. And I want to be on the cover of Time magazine, making lots of money.' All these greedy things are tempting."
"It's not like it's easy to just turn down. But my life is so much better." '
- BBC,
The boss who put everyone on 70K, February 28, 2020
Context'..a more interesting, human way of transforming yourself. It's about how you treat your employees.'(Business Roundtable) - '..corporate responsibility .. the best-run companies do more. They put the customer first and invest in their employees and communities .. to build long-term value..'(Corporate Rebels) - '..to learn how innovative businesses are changing how people work.''The “financialization” of the American economy has led to increasing income and wealth disparity. As much as it pains me to say it, the “system” really is rigged. Whatever the good intentions of the Federal Reserve in particular and the US government in general have been, it has distorted the economic feedback loops that balance a true market-based economic system.'
- John Mauldin,
Why Americans Want Socialism, February 21, 2020
The Most Redeeming Feature of Capitalism is FailurePaul Volcker, Last of the Great Central Bankers(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..''..BIS chastises central banks .. More fundamentally, monetary policy cannot be the engine of growth.''..monetary knowledge .. of currency reform under difficult conditions you have to go to Carl Menger.''Two Interest Rate Theorems' - 'Disinflationary effects of technology, aging demographics and excessive debt' - '..the bursting of China’s historic Bubble..''..things continue to follow the worst-case scenario .. It was another blunder for the global central bank community..'Hayek Was Right, Keynes Was Not An Economist - '..Keynes ducks entirely the role of bank credit in inflating the money-quantity..'