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Princeton University file photo.

(Michael Mancuso/The Times of Trenton)

PRINCETON -- The founder of a Seattle-based credit card processing company cited a study by Princeton University researchers on emotional well-being for his inspiration to hike the minimum wage of all his employees to $70,000 a year, according to The New York Times.

Dan Prince, CEO of Gravity Payments, announced the move Monday to elated employees and told them he would take a pay cut from his $1 million a year salary to join them at the new $70,000 annual minimum compensation.

Prince said his decision was based on a study by Princeton Researchers Angus Deaton and Daniel Kahneman published in 2010 in the Proceedings of the National Academy of Sciences of the United States of America.

The research concluded that what they called emotional well-being -- defined as "the emotional quality of an individual's everyday experience, the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one's life pleasant or unpleasant" -- rises with income, but only to a point. And that point turns out to be about $75,000 a year.

"Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone," according to the study abstract. "We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being."

The average salary at Gravity is $48,000. About 30 people will have their salaries double and another 70 will get significant raises, the New York Times reported. To pay for the move, Price plans to use 75 to 80 percent of the company's $2.2 million in profits in addition to his personal pay cut, the Times reported.

"As much as I'm a capitalist, there is nothing in the market that is making me do it," Price said in the Times article, referring to the pay raise. "The market rate for me as a C.E.O. compared to a regular person is ridiculous, it's absurd."

Keith Brown may be reached at kbrown@njtimes.com. Follow him on Twitter @KBrownTrenton. Find The Times of Trenton on Facebook.