How Gap's Wage Increase Benefits the Brand

Gap's lowest-paid retail employees now make $9 per hour, but it's not just workers who are benefitting.
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Dhani Mau
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Gap's lowest-paid retail employees now make $9 per hour, but it's not just workers who are benefitting.
She makes more money now than she did when this was taken. Photo: Saul Loeb/Getty

She makes more money now than she did when this was taken. Photo: Saul Loeb/Getty

As you've no doubt heard by now, Gap's minimum wage increase officially went into effect this week, meaning the chain's lowest-paid employee now makes $9 per hour. That wage will go up to $10 in June of 2015.

The wage increase was initially announced in February. Shortly thereafter, President Obama paid a visit to Gap's 42nd Street and 3rd Avenue store in a show of support for the pay raises -- which happened just after the government announced that, beginning Jan. 1 2015, all federally contracted employees will receive minimum wages of $10.10 (up from $7.25).

Gap's initiative is obviously great for the the company's retail employees and has created lots of good publicity, but those aren't the only reasons Gap went ahead with the raises.

As Michele Nyrop, senior director of HR for Gap brand, explained during a phone call Wednesday, the decision to raise wages began at the "business leader" level. "We are here to enable it, but really, it was a business decision."

Nyrop confirmed that applications have gone up significantly since the initial announcement, and "not just at the sales associate level but across even the leadership level," meaning managerial and directorial positions. "Being able to access a broader talent pool is one of the big wins."

Another reason for the wage hike was to make Gap and the company's other brands seem more desirable to potential applicants. "[We're] not always seen as the most glamorous place to work," admits Nyrop. 

The company also wants to revamp the way customer service works at its stores. Instead of associates just unlocking fitting rooms, stocking shelves and ringing people up, Nyrop wants to hire people who can "engage customers," "build loyalty" and "build a relationship with a customer." Meaning, presumably, people who are informed and care about the brand and plan to stay there for a while, as opposed to people who are just there to do the bare minimum for bare minimum pay. Lower turnover is another expected benefit: Nyrop says she wants people to see retail as a potential career, not just a job.

Given the positive outcome Gap has seen so far, it wouldn't be unreasonable to expect other companies to follow suit. "I do believe this will at least help make retail a good place to work," says Nyrop.

Not all responses have been entirely positive: Some worry that this increase in competition for part-time employment could ultimately have a negative impact on the job market, making it more difficult for people who really need low-paying hourly jobs to get them.

Nevertheless, Gap employees are predictably thrilled to be making more dough, and have already taken to social media in droves to post photos of themselves wearing white (which Nyrop explained was a nod to this Vanity Fair shoot). It'll be interesting to see, in the long run, how much of an impact the push for better customer service will have on Gap's turnaround efforts, particularly when paired with new creative director Rebekkah Bay's designs for the brand.