Wages at the Gap
Labor supporters were handed a bit of a blow last Friday when the workers in the Volkswagen plant in Chattanooga, Tennessee narrowly voted against unionizing. (The final count was 712 to 626.) Had the vote gone 44 votes in the other direction, the plant would have become the first plant in the South to join the United Automobile Workers.
But the labor news does not end there. Some good news splashed its way onto the pages today when Glenn K. Murphy, the chief executive of Gap, Inc., announced that this year the minimum hourly rate for United States employees would be $9, and that would increase to $10 in 2015.
This increase in wages, of course, comes a month after the State of the Union address, in which President Obama initiated a minimum wage increase for federal contractors of $10.10 (which he instituted by executive order just last week). Furthermore, House Democrats have announced plans to initiate a discharge petition to force a vote on the national minimum wage. Also, in a surprising turn of events, there is at least one report shows Wal-Mart considering backing a federal minimum wage increase.
The news about increased minimum wage is “bubbling up” in all corners of public policy, politics, and business these days. And that’s likely because a bump in the bare minimum amount that employers can pay employees is extraordinarily popular across demographics. Republicans, Independents, and Democrats all approve of increasing the minimum wage.
And now, even businesses, like Gap, Inc. are getting on board with a bump in wages, but not because they are altruistic businesses simply out to do the right thing (though there are some of those, too). Instead, Gap, Inc., claims that higher wages will help out their bottom line by helping them to retain talent and boost morale. Glenn Murphy claimed that the decision to increase wages was not a political issue, but rather an investment--one that he expects to pay off.
It just so happens that it’s also the right thing to do.