$ 70,000 a year. This is the amount of annual pay which makes people feel well-being. Those who earn less are less happy and less satisfied. Those who earn more, are more satisfied, but do not reach a higher level of happiness. These are results of a study performed by American psychologist and Nobel laureate in economics Daniel Kahneman and his colleague, Angus Deaton, from Princeton University. The study entitled High income improves evaluation of life but not emotional well-being was published in 2010 and is available online here.
U.S. entrepreneur Dan Price was intrigued by the results of this study, so much so, that he decided to put it into practice in his company Gravity Payments in Seattle. The company processes credit card payments and employs 120 people. He announced that in the next three years, he will increase all employees' salaries to a minimum amount of $ 70,000 per year. At the same time, he will decrease and his own salary, which has so far approached $ 1 million per year, to the same amount. Apart from his own salary, Dan will finance the increase in salaries from the company's profit. This information was published by The New York Times, including a video with the Price's announcement to employees.
Too huge a difference
The salary of 70 Gravity Payments employees will be increased and in the case of 30 employees even doubled. The current average salary in the company has been $ 48,000 a year. If we look at the statistics of the USA as a whole, CEOs earn on average 300 times more than the average employee, which is one of the biggest differences in the world.
Dan Price explains that his reasons are neither political nor economic. He wants to help break the huge income gap everybody is talking about but not doing anything about.“The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd,” he told the New York Times. If he is it really seriously, it is highly commendable.
How much do you think a happy person earns?
-kk-