Friday, February 21, 2014

The Gap, Old Navy and WalMart...Oh My!

The Gap, the retail clothing store and it's subsidiary stores such as Old Navy, Piperline, is giving their employees a raise - to $10.00 an hour. It will be $9 an hour next year and $10 by 2015. The Gap employs about 65,000 workers and has discovered that by paying it's workers an increased minimum wage they can hire and retain the best workers. 


There's another retail store that is looking at raising the pay for its employees to $10 an hour...WalMart!

"David Tovar, a Wal-Mart spokesman, told Bloomberg Wednesday that his company is "looking at" supporting a federal wage increase. "Whenever there's debates," he said, "it's not like we look once and make a decision. We look a few times from other angles." For now, the company remains neutral."
"Tovar did give one reason why the company might support an increase. Boosting the wage, he said, would mean that some Walmart shoppers would "now have additional income" to spend at the store. At the same time, "it's really hard to model behavior based on these kinds of changes," Tovar told Bloomberg."
"Wal-Mart has a total of 1.3 million U.S. employees. About 300,000 of those employees earn an average of $8.75 an hour, according to Berkeley's Labor Research Center. Boosting the federal minimum to $10.10 an hour from the current $7.25, which is the proposal from President Obama and Senate Democrats, could have a big impact just from the store's own employees."
"Some economists are on board with the idea. "If suddenly all these low-wage workers have more income, they are likely to spend that money right away," David Cooper of the left-leaning Economic Policy Institute told The Huffington Post last fall. "If an employee at McDonald's or Pizza Hut suddenly has additional income," he said, "they could spend it at Walmart.""
"There's not yet enough data out there to suggest the move would work, and Wal-Mart would most likely want to have more to go on than just the opinion of a few wage-increase advocates. But for a company with a problematic image when it comes to how it treats its workers, backing a change here could be a gain in itself. CVS isn't the only U.S. mega-store capable of making a big PR move that could come with serious up-front costs."
Just imagine a world in which WalMart employees didn't need government support supplements as a part of their employee pay packages! 

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