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Gap raises minimum wage to $9/hour
Clothing giant Gap stepped into the increasingly heated minimum wage debate by telling staff it would set a $9 minimum hourly rate this year and raise it to $10 next year.
The company said the move would benefit 65,000 of its 90,000 US employees at Gap, Banana Republic, Old Navy and other stores.
The increase comes as Washington is embroiled in a heated debate over a proposal backed by President Obama to increase the federal minimum wage to $10.10 an hour by 2016.
In a letter to the company’s employees, Glenn Murphy, Gap’s chief executive officer, said: “To us, this is not a political issue. Our decision to invest in frontline employees will directly support our business, and is one that we expect to deliver a return many times over.”
In a statement, Obama said: “I applaud Gap for announcing that they intend to raise wages... Right now, there is a bill in front of both the House and the Senate that would boost America’s minimum wage to $10.10 an hour, and lift wages for more than 16 million workers – all without requiring a single dollar in new taxes or spending. It’s time to pass that bill and give America a raise.”
Murphy said the company had invested heavily in technology and needed trained staff to operate those systems. “We have very good people today but to attract and retain the best talent we have to make sure we invest in them,” he told the Times.
The retail giant’s decision follows the publication of a report by the Congressional Budget Office that offered ammunition for both proponents and opponents of a hike in the minimum wage. The CBO report concluded that a rise similar to the one being championed by Obama would lift 900,000 people out of poverty and boost earnings for some 16.5m Americans. At the same time the hike could cost 500,000 jobs.
Gap’s move comes as Walmart denied a report that it, too, was examining a rise in the minimum wage. The company said a Bloomberg report had taken comments out of context. Walmart, other retailers and fast-food firms have faced a wave of protests over low wages in recent years.
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