Gap Inc., owner of Old Navy, Banana Republic and Gap apparel chains, said it would raise the minimum hourly wage pay for its U.S. employees to $9 in June 2014 and $10 in June 2015, benefiting about 65,000 store employees, Bloomberg News reported.
The announcement comes after President Barack Obama and the White House agreed to sign an executive order raising minimum wage for federal contract workers to $10.10 an hour, starting Jan. 1, 2015.
Gap signed an order to increase wages. The new order was applauded by Obama, who also encouraged employers nationwide to increase wages for their workers.
"In my State of the Union address, I asked more businesses to do what they can to raise their employees' wages," President Obama said in a statement. "I applaud Gap Inc. for announcing that they intend to raise wages for their employees beginning this year."
Chief Executive Officer Glenn Murphy said the success of the clothing chain is because of its employees.
"The people in our company who engage directly with our customers carry an incredible responsibility," Murphy said. "Our success is a result of their hard work, love of fashion and commitment. We hope this decision provides them with some additional support as they grow their careers with Gap Inc."
Jack Calhoun, global brand president of Banana Republic, said the move is a strategic investment and "the right thing to do" for the company's employees.
"Winning companies in our industry are competing for talent every day," Calhoun said in a phone interview, according to Bloomberg. "If I can attract and retain the best people in the industry, then I'm going to win, and if I win, our customer wins. There's a competitive advantage that we have as Gap Inc. by doing this."
According to Reuters, Wal-Mart Stores Inc (WMT.N), the largest private employer in the United States, said on Wednesday it will remain "neutral" on the federal minimum wage issue, and that an earlier report suggesting that the company was "looking at supporting" an increase in the federal minimum wage was false.
"We are looking into the impact that this proposal will be on our business," Wal-Mart spokeswoman Brooke Buchanan told Reuters on Wednesday. "We remain neutral. Our position has not changed."
