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Obama welcomes Gap decision to raise minimum wage to $9 an hour Obama welcomes Gap decision to raise minimum wage to $9 an hour
(6 months later)
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 and raise it to $10 next year.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 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 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.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 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.” 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 told the New York Times that the company was keen to minimise the impact of a checkerboard of different minimum wage standards across the states. In San Francisco, Gap’s hometown, the minimum wage is $10.74 an hour. California will raise its minimum wage statewide to $10 by 2016. Neighbouring Arizona has one of the lowest minimum wages at $7.80 an hour.Murphy told the New York Times that the company was keen to minimise the impact of a checkerboard of different minimum wage standards across the states. In San Francisco, Gap’s hometown, the minimum wage is $10.74 an hour. California will raise its minimum wage statewide to $10 by 2016. Neighbouring Arizona has one of the lowest minimum wages at $7.80 an hour.
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.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.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.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.
On Thursday Walmart released disappointing financial results and said cuts in government benefits, higher taxes and increased group health-care costs were weighing on sales. Critics seized on the sales slip.On Thursday Walmart released disappointing financial results and said cuts in government benefits, higher taxes and increased group health-care costs were weighing on sales. Critics seized on the sales slip.
Barbara Gertz, a member of the union-backed Our Walmart pressure group, said: “Walmart’s weak sales confirm what experts, analysts and thousands of workers like me have been saying for years: the challenges we face every day on the job don’t just hurt workers, they impact Walmart’s sales. As the country’s largest employer, Walmart sets the standard for jobs in this country, and it’s no surprise its poverty wages and short-staffing are taking their toll on business.” Barbara Gertz, a member of the union-backed Our Walmart pressure group, said: “Walmart’s weak sales confirm what experts, analysts and thousands of workers like me have been saying for years: the challenges we face every day on the job don’t just hurt workers, they impact Walmart’s sales. As the country’s largest employer, Walmart sets the standard for jobs in this country, and it’s no surprise its poverty wages and short-staffing are taking their toll on business.”