Running a business is a lot of work and managing payroll is one of the most tedious — but important — parts of the gig. Keeping a staff of happy, productive employees can often depend on what you’re paying them for their valuable time. Jealousy and resentment can rise through the ranks if people find out they’re making less than a co-worker for doing the same work.
But one business owner has found a unique way to avoid that common issue: She pays every person on the payroll an identical wage — including herself.
Madeline Pendleton operates a clothing store in Los Angeles and has also built up a massive following on TikTok (1.1 million followers and counting) because of her frank, intelligent videos answering questions from viewers about everything from fashion to social issues.
In April, Pendleton posted a video where she explained her company’s universal wage, which covers a staff of 10 full-time employees that includes herself, and the way she reached it is incredibly simple. The clip has been liked about 30,000 times so far and has inspired more than 1,000 comments from people who seem to either love her idea or doubt its realism.
@madeline_pendleton #answer to @queen_of_reptiles #greenscreen ♬ original sound – Madeline Pendleton
In the clip, Pendleton says her payroll for full-time workers is about $730,000 a year, which she simply divides by the number of workers, giving them each a salary of about $73,000. This means all of her workers make just above Los Angeles County’s median household income of $71,358.
“You just take everyone’s salary in the whole place and then you average them out among the number of workers you have,” Pendleton says. “Boom: The company has a universal wage!”
She then goes on to explain how, using the same payroll total, she could pay herself a salary of over $430,000 while paying her other nine full-timers $16 an hour, which would be slightly above minimum wage in L.A.
“That would mean their annual salaries would be $33,280 a year each,” Pendleton says in the video while contrasting her hypothetical six-figure salary and laughing. “It’s ridiculous! This is what those CEOs are doing so they can make that $24 million a year while you guys make like $30K or whatever.”
The entrepreneur says that all companies could “absolutely” follow this model and that “it’s just income redistribution, really.”
Many commenters had questions about how her plan would work for businesses that have employees with vastly different levels of experience and responsibility. She didn’t offer specific thoughts on those cases but kept her philosophy the same.
“I think my brain gets stuck when we start talking education and experience levels,” a commenter named Ruthy wrote. “Like assistant vs. manager as a small example.”
“If your job is necessary, it’s just as valuable,” Pendleton replied.