In 2015, CEO of Gravity Payments Dan Price, announced his decision to raise the minimum wage of his employees to $70,000 USD over the next 3 years. Dan Price made this decision after reading a happiness study from Princeton that stated employees wellbeing and happiness rose with income increases up to $75,000 USD per year (at which point income stopped affecting happiness.) To fund these increases, the CEO dramatically reduced his salary from $1 Million USD to $70,000 USD and is projecting higher profits in the coming years (O’Brien, 2015).
Critics of the decision have been some internal employees who did not think it was fair that their colleagues with less skills and education had their wages raised to the same level as them. Other CEO’s …show more content…
By investing in his employees well-being and ensuring that they have a wage that they can live on comfortably, Dan believes that his employees will look after their customers better and drive the business forward in profit and growth.
While Gravity Payments already paid a salary considered competitive in the industry, there were lower paid positions paying only around $40,000 USD per year that Dan recognized was difficult for employees to live on in Seattle and so started his campaign for income equality by raising these first(O’Brien, 2015).
The underlying ethical dilemma raised in the article by O’Brien (2015) is “do companies have a moral duty to pay employees a higher wage than the minimum set by law in the country the business operates in, when they can afford to do so?”
In applied ethics, specific issues such as this are analyzed to attempt to answer the question of whether something is morally right or morally wrong using the theories and concepts of normative ethics. (Fieser, …show more content…
(Fieser, J. n.d) It would be kind and generous to pay employees higher than the minimum wage, therefore morally right.
Approaching the ethical question of income equality from the consequentialist perspective, we can look to the theories of utilitarianism to provide support with “The greatest balance of goods over harms” and promoting the happiness of everyone concerned (Markkula Center For Applied Ethics 2014).
Finally, while duty based ethics often conflicts in many areas with consequentialism, there are also theories here that support closing the gap on wealth disparity. One such example of this is Imanuel Kant’s categorical imperative that says “Treat people as an end, and never as a means to an end.” (Fieser, J. n.d) Rather than using employees as a tool to get a job done, there is a moral duty to to go above the minimum legal requirements in business.
Based on these concepts and theories within a broad range of ethical types, and the stakeholder focussed approach in business ethics, the best ethical action a company can take is to pay it’s employers a higher wage than the legal minimum because it is morally correct to do
Critics of the decision have been some internal employees who did not think it was fair that their colleagues with less skills and education had their wages raised to the same level as them. Other CEO’s …show more content…
By investing in his employees well-being and ensuring that they have a wage that they can live on comfortably, Dan believes that his employees will look after their customers better and drive the business forward in profit and growth.
While Gravity Payments already paid a salary considered competitive in the industry, there were lower paid positions paying only around $40,000 USD per year that Dan recognized was difficult for employees to live on in Seattle and so started his campaign for income equality by raising these first(O’Brien, 2015).
The underlying ethical dilemma raised in the article by O’Brien (2015) is “do companies have a moral duty to pay employees a higher wage than the minimum set by law in the country the business operates in, when they can afford to do so?”
In applied ethics, specific issues such as this are analyzed to attempt to answer the question of whether something is morally right or morally wrong using the theories and concepts of normative ethics. (Fieser, …show more content…
(Fieser, J. n.d) It would be kind and generous to pay employees higher than the minimum wage, therefore morally right.
Approaching the ethical question of income equality from the consequentialist perspective, we can look to the theories of utilitarianism to provide support with “The greatest balance of goods over harms” and promoting the happiness of everyone concerned (Markkula Center For Applied Ethics 2014).
Finally, while duty based ethics often conflicts in many areas with consequentialism, there are also theories here that support closing the gap on wealth disparity. One such example of this is Imanuel Kant’s categorical imperative that says “Treat people as an end, and never as a means to an end.” (Fieser, J. n.d) Rather than using employees as a tool to get a job done, there is a moral duty to to go above the minimum legal requirements in business.
Based on these concepts and theories within a broad range of ethical types, and the stakeholder focussed approach in business ethics, the best ethical action a company can take is to pay it’s employers a higher wage than the legal minimum because it is morally correct to do