Gap Inc. Raises Pay; Will Walmart Follow?

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A bump in pay is on the way for Gap employees. Gap Inc. announced that it’s raising its minimum hourly wage to $9 in June and $10 by June 2015.

Gap, which also owns Old Navy, Banana Republic, Piperlime and Athleta, said 65,000 store employees will benefit from the pay raise.

According to Bloomberg, Gap CEO Glenn Murphy said the move is an investment in its employees.

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

The announcement by Gap came on the heels of President Obama’s executive order to raise the minimum wage for federal contract workers to $10.10, from $7.25, next year. Obama praised Gap’s decision.

So, with news about Gap, many are wondering: What will retail behemoth Walmart do?

According to The Wall Street Journal, Walmart, the nation’s largest private employer, says it’s not taking sides in the minimum wage debate. Walmart publicly supported an increase in the minimum wage in 2007. “This time we decided we’re going to stay neutral,” Walmart spokesman David Tovar told the Journal. “Elected officials can have the dialogue and ultimately decide what the right thing is to do about this.”

As we’ve noted before, Walmart employees would gain a lot from higher pay, with little impact on shoppers.

In related news, The New York Times reported that a new study by the nonpartisan Congressional Budget Office found mixed results from raising the federal minimum wage to $10.10 — eliminating 500,000 jobs while raising the pay for 16.5 million Americans and lifting nearly 1 million families out of poverty.

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  • nitemare2

    I understand you hate Wal-Mart but please explain how
    raising the minimum wage to $10 dollars while eliminating 500,000 jobs will
    result in your theory of “lifting nearly 1 million families out of
    poverty.” The federal poverty level is $23850 for a family of 4 your new
    minimum wage would only be $21008, for a single person it is considered poverty
    at $11,670 and the minimum wage of $7.25 is a yearly income of $15080. So where
    are you going to lift a million out of poverty? And as I gave you the numbers
    in answer to a previous article most of these people are part time which means
    even fewer people would be “lifted out of poverty.” Do you have any
    answers or just expect your liberal views to be believed as proof. You and
    Stacey like to point out Costco as a company who pays a “living wage”
    which is great but they also charge a membership free to shop there of $110 per
    year to cover those costs. Should all the other companies follow that plan?
    Should they just raise the prices to cover this, or maybe fire some people to
    adjust the pay of others because that is what the NYT seems to think is a good solution?
    UPS was on strike around 1999-2000 and was told by management to meet their
    demands they would have to lay off 5000 fellow union members, the union said ok
    they are just those with the lowest seniority anyway. Liberal thinking at its
    finest! I would rather everyone kept working and got a check of some kind then
    add another 500,000 to the rolls of not working and if they are part time can
    they even get any unemployment benefits. But I guess Pelosi will just say now
    they can do as they want and not have to worry about a job. What is your next
    welfare program to give those fired a check just because?

    • languy1

      You do not have to pay 110 a year for a membership. The basic membership is $55. Let’s make sure we keep the facts straight.

      • nitemare2

        Lets also get facts straight Costco, Number of U.S. employees:126,929 full and part-time, 71.2 million cardholders, Annual revenues(FY13 – Ended 9/01/13):$105.2 billion. Wal-Mart employees 1.4 million, no membership fee, Their net income was $17 billion. Wait for it Costco can afford to pay higher wages because they made more profit and had 1/10 of the employees of Wal-Mart. Liberal math like Krystal uses can’t figure those things out can you, it is all a liberal/union agenda against Wal-Mart

  • Patrick Seitz

    I’m betting this has more to do with California’s minimum wage increase than the executive order for federal contractors. Minimum wage in California will increase to $9.00 per hour on July 1, 2014 and to $10.00 per hour on January 1, 2016. Obviously Gap employees workers in more than just California, but perhaps they don’t have wage differences based on region.