At 31, Dan 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. His friend brought home to him that a lot of his staff must be struggling - and he decided to change that.
Before 1995 the poorest half of the population of the United States earned a greater share of national wealth than the richest 1%.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).
After crunching the numbers, Price 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.
Since then, Gravity has transformed. The headcount has doubled and the value of payments that the company processes has gone from $3.8bn a year to $10.2bn. But there are other metrics that Price is more proud of. Before the $70,000 minimum wage, employees were having between zero and two babies born per year amongst the team, and since the announcement - and it's been only about four-and-a-half years - they've had more than 40 babies.
At the time, Seattle was debating an increase to the minimum wage to $15, making it the highest in the US at the time. Small business owners were fighting it, claiming they would go out of business. The right-wing radio pundit, Rush Limbaugh, whom Price had listened to every day in his childhood, called him a communist. “I hope this company is a case study in MBA programmes on how socialism does not work, because it's going to fail," he said.
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. Raising salaries didn't change people's motivation - Price says staff were already motivated to work hard - but it increased what he calls their capability.
