Gap has voluntarily increased their minimum wage to $9 and
expects to raise it to $10 in 2015. Many are saying that the reason that Gap
has made this move is because of the scandal in Bangladesh. In recent news Gaps
factory garment factory located there has had terrible working conditions as
well as factory disaster that killed thousands. So because of this recent
scandal for Gap to clear they’re name they have decided to increase they’re
employees minimum wage and it seems to be doing well for them.
http://www.huffingtonpost.com/2014/02/20/gap-minimum-wage_n_4826415.html?utm_hp_ref=business
In regards to raising Gap's minimum wage, Gap CEO Glenn Murphy said, "such a "strategic investment" would better the lives of Gap workers while delivering the company "a return many times over" through higher productivity and morale." This is the idea of efficiency wages, which we discussed in class. Efficiency wages are higher than market wages which are said to increase workers' productivity and efficiency, as well as reduce costs associated with turnover.
ReplyDeleteAlthough they were the first to increase their wages i believe that many other companies will begin to do this in order to relieve themselves from scandal. Also there is a possible law that is in the midst of being passed that would raise the minimum wage so Gap just beat the rest of the companies to the punch.
ReplyDeleteI believe that this is not what we should do as a country. If we keep raising the minimum wage, people will continue to lose their jobs and the unemployment rate will increase even more. With unemployment as a main concern for our country, this policy will just go against what we are trying to do to help the economy and get people jobs.
ReplyDeleteThis does seem like a way to cover up scandal, however it is a tactic that seems to be effective. I think that the efficiency wages do do a great deal to boost moral in a company and to make sure the workers are more productive and want to do a good job, so that they can stay in their job.
ReplyDelete