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Gap’s move may lift others’ wages

NEW YORK — Gap’s decision this week to raise hourly wages at its stores nationwide puts pressure on other major US retailers to do the same.

Following Gap’s announcement that it will set the minimum wage at $9 an hour this year and $10 in 2015, big chains from Walmart to Sears said Thursday that they will continue to evaluate wages.

But ultimately, industry watchers say whether they follow Gap’s move will depend greatly on whether they decide they must to be competitive.

‘‘I think more people will wait on the sidelines and not take on additional expenses,’’ said Ken Perkins, president of RetailMetrics, a research firm. ‘‘It’s a gamble on Gap’s part.’’


Protests by fast food workers asking for higher pay last year in cities across the country made headlines. Several states are considering raising their minimum wage. And President Obama endorses a bill that includes a proposed increase in the federal minimum wage to $10.10 an hour by 2016.

Still, the retail industry has mostly shunned the idea of higher wages. The National Retail Federation says the financial burden could force them to raise prices or reduce the size of the workforce.

To stay competitive, experts say, retailers have to offer the low prices shoppers demand. But to profit, they say they must keep labor costs low.

Earnings for the fourth quarter, which covered the holiday shopping season, are expected to be down 5 percent compared with a year earlier — the worst since the second quarter of 2009, according to RetailMetrics’ tally of 122 stores.

Gap Inc. has been a bright spot in the clothing industry, enjoying a sales turnaround that started in early 2012. It owns the Gap, Old Navy, Banana Republic, and Athleta.

Gap, the nation’s largest clothing chain, declined to give an average wage for its employees, but said the vast majority make more than the federal minimum. The company said the raise will affect 65,000 hourly workers.


Nancy Green, general manager of the Athleta brand, said she believes some competitors can’t afford to raise wages, but ‘‘others will be inspired.’’

So far, though, rivals don’t seem inspired. Target Corp. declined to comment on average pay for a Target hourly worker, but said in an e-mail that it’s ‘‘considering how best to balance the needs of working Americans while maintaining a healthy business environment conducive to job creation.’’

Walmart Stores Inc., the nation’s largest private employer with 1.3 million US workers, said that less than 1 percent of its workforce is paid minimum wage. It said its average wage for both full- and part-time hourly workers is nearly $12 an hour. ‘‘Our wages are determined on a market-by-market basis, and we continually look at them in order to remain competitive,’’ a spokesman said.

Sears Holdings Inc., which operates Kmart and Sears, said it plans to ‘‘continually monitor and evaluate our pay and benefit programs in light of business and market conditions.’’