Checking in on President Obama's pay hike request

A pedestrian walks by a Gap store on February 7, 2013 in San Francisco, Calif.

President Barack Obama has proposed raising the federal minimum hourly wage to $10.10 from $7.25. One reason why a minimum wage could be the most recent focus of attention for the president? The White House released a white paper on long-term unemployment trends in January that included this statistic: laid-off workers face 15 percent lower wages after being re-employed compared to workers who have been continuously employed.

Raising the minimum wage is one way to make sure long-term unemployed workers can find jobs that pay at least as much as what they were making before, though the Congressional Budget Office recently stated some of those available jobs might disappear under a federally-mandated raise, a concern which the National Retail Federation echoed in its official response.

In lieu of changing the law, some major employers in the United States have responded to the president’s second wish. Which companies have chosen to voluntarily raise the minimum hourly wage they offer their individual employees?

On Thursday, Gap said it would raise the hourly pay for its U.S. employees to $9 in June 2014 and $10 in June 2015. Gap is the parent company of Old Navy, Banana Republic, and Gap said the increased pay will benefit about 65,000 store employees. (CNBC)

Marketplace's Adriene Hill reported on the business case that Gap considering in making this decision. For the story, Hill interviewed Jack Calhoun, president of Banana Republic. Here is a longer interview with Calhoun (and hear the whole piece above):

We also took a look at a handful of the largest apparel and food chain companies in the United States to get a sense of their stance:

  • Target and Dollar General declined to state their position on a wage hike (Business Week)
  • Walmart says it remains “neutral” on the topic (CNBC) and is looking at the impact of supporting the federal standard, if passed. (Bloomberg)
  • Costco's hourly pay starts at $11.50; $2.18 higher than Costco's home state of Washington's minimum wage, which is right now the highest in the nation. (Yahoo!)
  • Trader Joe’s is known for paying workers higher than the minimum wage.
  • Whole Foods, too -- entry level pay is unknown, but team members make "an average of $15 per hour." (Yahoo! Finance)
  • Zappos, the online apparel company owned by Amazon, pays up to $16 per hour for its call center representatives. (Forbes)

About the author

Margarita Noriega is an editor with Marketplace's digital team, based in New York.

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