In a move, which the company claims to be not politically motivated, Gaps Chairman and CEO, Glenn Murphy has raised the minimum hourly wage rate for stateside employees from $7.25 dollars to $9 dollars in June 2014. This would be further revised to $10 a year later. Recently, the White House had said that the minimum wage for federal contract workers would be raised to $10.10 an hour in 2015. President Obama has applauded the Gap move in a statement, stating a minimum wage increase would lift the incomes of more than 16 million Amherican workers.
According to the company, the increase in hourly wage rate would affect 65,000 employees by 2015. But it also said that not all these workers are currently earning the minimum wage. Murphy believes that the current wage hike is with an aim to strengthen frontline employees to further enhance an in-store experience. Gap employs 1,35,000 employees across 50 countries and currently owns six brands, including Banana Republic, Old Navy, Piperlime, Athleta and Intermix.
On the other hand, Walmart, the largest retailer and private employer in the United States has decided to stay ‘neutral’ on the wage issue since it already pays most full-time employees above 10.10 dollars (Rs 626.9). However, as per the recent report by nonpartisan Congressional Budget Office, increasing wages to 10.10 dollars would result in the loss of 500,000 jobs.
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