Gap Inc. Raises Pay; Will Walmart Follow?

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The retailer announced it will pay its employees no less than $10 an hour by next year.

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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