Gravity Payments, a credit card processor based in Seattle, is breaking the mould by setting a new company-wide minimum wage of $70,000 per year. The company’s founder and CEO, Dan Price, announced the news to his 120-member staff, many of whom were earning less than $40,000. Price plans to cut his own $1 million salary to $70,000 to help fund the wage increase, along with 75-80% of the company’s anticipated $2.2 million in profit this year.

The move is unprecedented in the current corporate climate, where CEO pay is on average 300 times that of the typical worker. Price’s decision was influenced by a study showing that additional income above $75,000 per year does not significantly improve an individual’s happiness. He hopes the wage increase will improve the lives of his employees and boost productivity.

The new pay policy will be phased in over the next three years. Initially, anyone making less than $50,000 will immediately have their pay raised to that level. The company’s average salary is currently $48,000. The move has been met with tears of joy and disbelief by employees, many of whom never thought they would earn such a salary.

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