This week: Cashless society, ‘noflation’ and the US firm with a minimum $70,000 salary
Image of the week: What could these two – European Commission President Jean-Claude Juncker and EU Competition Commissioner Margrethe Vestager – be talking about? Photograph: Reuters/Francois Lenoir
Gravity Payments founder Dan Price intends to cut his salary from almost $1 million to $70,000 to give his employees a significant raise.
Image of the Week: Operation antitrust
What could these two – European Commission president Jean-Claude Juncker and competition commissioner Margrethe Vestager – possibly be talking about? Vestager is surely mouthing “don’t look now, there’s a photographer over there”, while Juncker can only be replying, “Thanks for the warning, I’m going to do a hand gesture that makes me look authoritative and decisive, because this is a big day for us.” Indeed, after a meeting of its executive body in Brussels on Wednesday, the European Commission duly accused Google of abusing its dominant position in online search, sending it a “statement of objections” to how it does business in Europe. The EU v Google is set to run and run.
In Numbers: Cashless society
€19.9 billion Total value of debit card payments in the Republic last year, according to Banking & Payments Federation Ireland (BPFI). The total number of transactions increased 13.4 per cent to 386 million.
€20.3 billion Value of cash withdrawn from ATMs last year. But the total number of withdrawals fell 2.6 per cent to 163.1 million.
€56 million Average sum withdrawn each day from Irish ATMs. But the BPFI predicts, based on the current trends, that the value of debit card payments will overtake ATM withdrawals this year as we increasingly ditch cash for plastic.
The Lexicon: Noflation
When prices rise, it’s inflation; when the fall, it’s deflation. But what word do economic journalists use when prices are flat? Merely noting that “the rate of inflation is 0 per cent” would be boring so instead we have “noflation”, a coinage that has become more popular in the last couple of months in the UK, where the Office for National Statistics has indeed calculated that the annual rate of change in its consumer price index has slumped to zero – as indeed it has in Japan.
Britain looks poised to head into deflation – a club that Ireland’s been in since December. A little bit of “noflation” might be okay. But it’s the dreaded “deflationary spiral”, where debts become harder for people to service, that all economies want to avoid.
Getting to Know: Dan Price
Top tip for employees this week: encourage your boss to read up on happiness. Gravity Payments founder Dan Price says he read an article that discussed how extra money makes a big difference to the lives of people who earn less than about $70,000 (€66,000). Who knew? But we’re not going to slag off Price. Because what he did next was tell his 120 employees that the salary of even the lowest-paid member of staff would be increased to $70,000 over the next three years – a move that Price, who set up the Seattle card-processing company in 2004 aged 19, is partly funding by cutting his own salary from almost $1 million to $70,000.
“The market rate for me as a CEO compared to a regular person is ridiculous, it’s absurd,” said Price, who told the New York Times that his main extravagances were snowboarding and picking up the bar bill.