The apparel retailer announced plans to raise the chain's minimum wage to $9 per hour this June and to $10 per hour in June 2015. The $10 per hour level is 38% higher than the federal minimum wage of just $7.25.
As The Gap becomes increasing omnichannel with ship-from-store, find-in-store, order-in-store, and reserve-in- store either deployed or in various stages of development, the importance of qualified associates to both interact with the technology and explain and sell it to customers became magnified.
"In spite of what other people may be thinking about stores and their future, we're actually looking at the role of the store incrementally increasing as more and more of these initiatives, and these ideas, and these convenient services get provided to customers," chairman and CEO Glenn Murphy said.
The Gap's decision to increase the hourly wage for its store associates comes as politicians in Washington are in a heated debate over the increase of the federal minimum wage. In his State of the Union address in January President Obama called for the raising of the minimum wage to $10.10 per hour. Obama released a statement congratulating the Gap's voluntary increase last week.
"In my State of the Union address, I asked more businesses to do what they can to raise their employees' wages," the President said. "Today, I applaud Gap Inc. for announcing that they intend to raise wages for their employees beginning this year. But only action from Congress can make a difference nationwide."
While increasing its minimum wage will likely increase the quality of life of many of its associates and become fodder for the ongoing political debate, the Gap's decision was strictly business. "To us, this is not a political issue," Murphy said. "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."
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