Gap Inc raises minimum wage for 65,000 US employees

Thursday, 20 February 2014
Fashion retailer Gap Inc is making a “strategic investment to do more for [its] employees” by raising its minimum hourly pay for its US based work force to 9 dollars in 2014 and 10 dollars in 2015. Gap Inc announced on Wednesday that the wage increases would effect 65,000 of its 90,000 US employees, including sales associates at Old Navy, Banana Republic and other brands. This decision comes to light as a number of states contemplate increasing their minimum wage and President Obama's call for a new federal minimum wage of 10.10 dollars an hour in a bill that currently under debate.

Gap Inc wants to 'do more than sell clothes'

In an open letter, Glenn Murphy, chairman and CEO Gap Inc highlights that the wage increase is part of the company's philosophy of doing “more than sell clothes,” and comes after 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.”

While explaining the reasoning behind the wage increase, Murphy said: “We work for a company with a strong set of values, which can be directly linked to our founders, Doris and Don Fisher. They invented specialty apparel retail, but Don also challenged us to live up to our promise to ‘do more than sell clothes’."

Murphy adds that this decision is “not a political issue,” but rather a decision to “invest in front line employees” which will directly support the company's business and “deliver a return many times over”. In addition, Gap Inc believes that the employees in their company who interact with customers “carry an incredible responsibility” and want to give them “additional support as they grow their careers with Gap Inc".

The President has applauded Gap's Inc wage increase and in a statement said that he asks “more businesses to do what they can to raise their employees' wages.” Other large retailers such as Whole Foods and Costco have also agreed to increase their hourly pay above the federal minimum of 7.25 dollars, while Walmart announced it is considering supporting a wage increase for its employees in the US but has not determined yet what the impact it may have on its business.

Gap Inc currently operates in more than 50 countries and have over 135,000 employees around the world. The company did not disclose how the wage increase may affect its business.

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