Gap Promises To Increase Worker Minimum Wage To $10/Hour… In A Year Or So

While lawmakers argue about the possible benefits and risks of raising the federal minimum wage by more than 25%, the CEO of Gap Inc. says it will gradually increase its lowest wage tier to $10 an hour over the next two years.

“[A]fter many months of consideration, we’ve made a business decision that’s right for our brands, good for our people and beneficial to our customers,” writes Gap head honcho Glenn Murphy, who said the company has notified employees that the minimum hourly rate is increasing to nine dollars in 2014, with the additional dollar-per-hour coming next year.

More precisely, those wage changes will go into effect in June of their respective years.

The pay increase will initially only happen in the U.S. In total, this will mean a slight pay bump for around 65,000 in-store employees for the retailer, which also includes Banana Republic, Old Navy, Athleta, Piperlime, and Intermix.

“To us, this is not a political issue,” says Murphy. “Our decision to invest in frontline employees will directly support our business, and is one that we expect to deliver a return many times over.”

In an FAQ about the decision, the retailer explains that “a customer’s lasting impression is often shaped by the interactions with the people in our stores,” adding that in an age where more and more shoppers do their buying online — including those who shop at the various Gap websites — it’s more important than ever that the company “must attract and retain great talent.”

The Gap announcement comes the same day that Walmart revealed that, unlike many of its big box counterparts, it has not yet made a decision on the White House proposal to increase the federal minimum hourly wage from $7.25 to $10.10.

The nation’s largest retailer says it is trying to figure out which will have the more significant impact on the economy — the additional money paid to low-wage employees or the predicted loss of jobs that would result from companies that can not afford to pay all the higher wage to their existing workers.

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  1. CommonC3nts says:

    Walmart lied, they would not have lost jobs because of wage increases to $10 an hour because only a very small % of their profits can pay for it.
    Also, you only hire the workers you need, you dont hire workers to stand around just because minimum wage is lower. Increasing minimum wage wont magically mean they need less workers.

  2. furiousd says:

    This is how the minimum wage should change. Businesses who start the trend first can be selective about who they hire. When other businesses find that they cannot find people to work for them at the rate they previously paid, everyone will rise to match or settle for lower-quality employees at a ‘better’ rate.