Last week I was happy to hear the news that Gap would raise the minimum wage for employees to over $10 by next year. The business world has been debating the impacts of raising minimum wage for a while, but discussions have seemed to be more heated recently.
I really believe minimum wage has to increase to make life sustainable for those on the bottom of the salary pyramid. It has been almost five years since the the federal minimum wage has been raised; It was set at $7.25 in 2009. I think the Gap is a model for other businesses, choosing to make this change without being pushed by law. This is not a trivial decision on the Gap’s part, as they are estimating it will impact 65,000 employees. With this move Gap is demonstrating their respect for their employees. In turn they are hoping for better sales from their associates, lower turnover and improved customer service. The positive PR they’ll receive from the move won’t hurt either.
While the Gap is investing in their workforce, it may take a while to see results. I admire the company for making this move and I’m sure that it will only help their reputation. I think Gap is setting the right precedent.