Updated as of 02/23/14
Gap Inc. has made a strategic investment to do more for our employees by increasing the minimum hourly rate for our U.S. employees to $9 in 2014 and $10 in 2015.
Why is Gap Inc. taking this action?
Over the last five years, retail has changed rapidly, and we've stayed ahead of others by investing in technology. And yet, a customer's lasting impression is often shaped by the interactions with the people in our stores. To connect and enhance the in-store and digital experience for our customers even more, we must attract and retain great talent. As a result, we're raising the minimum hourly rate for people who work in our U.S. stores across all of our brands - Gap, Old Navy, Banana Republic, Athleta, Piperlime and Intermix.
Our CEO and others within the company have been evaluating this for some time. Given the needs of our business, we have an opportunity to "do more" for our employees — just as our co-founder, Don Fisher, would have wanted — while investing in our growth strategy and adding value for our shareholders. Gap Inc. will increase the minimum hourly rate for our U.S. employees to $10 in 2015. Specifically, we will increase the minimum hourly rate to $9 in June 2014 and to $10 in June 2015.
How many people will benefit?
Gap Inc. is proud to offer competitive wages and benefits to our full-time and part-time employees, as well as ongoing training and career development. The majority of U.S. employees in our stores, calls centers and distribution centers currently earn more than the federal minimum wage of $7.25. About 65,000 U.S. store employees will benefit from this investment between now and 2015.
Why did you choose $10 as the minimum hourly rate?
Our analysis determined that by increasing hourly pay for U.S. employees to a minimum of $10 in 2015, we can strengthen our ability to attract and retain a skilled, enthusiastic and engaged workforce. Our employees are our most important ambassadors, and we believe that investing in our frontline talent will strengthen and deepen relationships with our customers.
Why invest in stores when online is growing?
Today, as we're building the bridge between our in-store and digital shopping experience, the people who work in our stores will be counted on more than ever. We know there's something so personal about fashion, and our store associates are important to creating a great shopping experience for our customers every day.
How will Gap Inc. cover the cost of this decision?
We're a financially strong and healthy company, and our management team has consistently demonstrated the strength and potential of our business model, as well as our discipline in managing costs. While we're not publicly quantifying the financial impact of this decision, we're confident that we can fulfill this commitment while continuing to deliver strong results for our shareholders.
Can you tell me about Gap Inc.'s core values?
Our company's values have long set us apart from others in the industry. Our promise — "to do more than sell clothes" — is a direct quote from our co-founder Don Fisher, who challenged us to be broader than a commercially-driven company. Our employees are proud to be part of a company that places a high value on giving back to the communities where we live and work; their words and actions tell us so.
How does Gap Inc. give back to the community?
Our founders modeled the practice of giving back to the communities in which we operate, and that continues to inspire us today. In 2013, more than 50,000 employees volunteered in excess of 500,000 hours of their time. Through Gap Foundation's community partners, we support thousands of underserved youth and young adults through programs such as, "This Way Ahead," "Plan Ahead," and "Camp Old Navy." Globally, we're committed to creating opportunities for women through programs such as Gap Inc. P.A.C.E. (Personal Advancement & Career Enhancement) in which more than 25,000 women have participated around the world.
Since the Feb. 19 announcement of planned increases in the hourly minimum rates for U.S. employees in 2014 and 2015, thousands of store managers and human resources professionals have been busy providing details to our store employees, particularly those who will benefit most. Outlined below is a brief overview of the program to help answer questions that have been raised by our employees. We will be providing periodic updates with additional information on program implementation, as appropriate.