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Gap Increases Worker Pay Amid Debate About Minimum Wage

Gap campaign 2014 | Source: Gap
By
  • Bloomberg

SAN FRANCISCO, United States — Gap Inc., the owner of Old Navy, Banana Republic and its namesake apparel chain, will raise its hourly pay for U.S. employees to $9 in 2014 and $10 the following year, saying it wants to "do more than sell clothes."

The increased pay will benefit about 65,000 store employees, the San Francisco-based company said today in a statement. Chief Executive Officer Glenn Murphy announced the plan during an employee conference call this morning.

In making the move, Gap adds fodder to a national debate on whether the federal government needs to step in and raise the minimum wage. President Barack Obama and Senate Democrats want to increase the rate to $10.10 an hour from $7.25, saying it will bolster the economy and reduce income equality. Most Republican lawmakers oppose the idea.

“To us, this is not a political issue,” Murphy said in a statement on the Gap website. “Our decision to invest in front- line employees will directly support our business, and is one that we expect to deliver a return many times over.”

Wal-Mart Stores Inc., the largest private employer in the U.S., said today that it’s looking at supporting an increase in the federal minimum wage, breaking with other businesses and industry groups.

Wal-Mart is weighing the impact of additional payroll costs against possibly attracting more consumer dollars at its stores, said David Tovar, a spokesman for the Bentonville, Arkansas- based company.

At Gap, the biggest apparel-focused retailer in the U.S., the wage change will affect all six of its chains, including Piperlime, Athleta and Intermix.

“The people in our company who engage directly with our customers carry an incredible responsibility,” Murphy said. “Our success is a result of their hard work, love of fashion and commitment. We hope this decision provides them with some additional support as they grow their careers with Gap Inc.”

By Lindsey Rupp; Editor: Nick Turner

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