Gap CEO Announces Minimum Wage Raise for Employees
When it's all said and done, this is a race for talent," explained Glenn Murphy of the pay increase during his interview on "CBS This Morning."
While the U.S. Senate fights for a minimum wage increase in the U.S., one retailer isn't waiting to see what Washington decides. Gap, the retailer known for its casually cool denim designs, announced on Tuesday that the company is raising its minimum wage from $9 per hour this week to $10 per hour in June 2015.
During his first-ever TV interview on CBS This Morning, Gap chairman and CEO Glenn Murphy expressed why he decided to approve of the additional pay increase.
"In a world where retail is becoming more complicated, not easier, we said to ourselves, 'You know what, our employees are going to be asked to do so much more. So we're going to need better.' We've got great employees today," he tells the show's co-host Gayle King.
While some may argue that raising minimum wage could hurt businesses, Murphy believes otherwise.
"We weren't swayed by any of those conversations. Our instincts are that when it's all said and done, this is a race for talent," he explains. "And if we have the best talent in our office, in our distribution centers, in our call centers and mostly in our stores, then we're going to win. And we've got evidence already. Our applications to Old Navy since our announcement are up 20 percent."
Gap Inc., which also operates Old Navy, Banana Republic, Athleta, Intermix and Piperlime, surpassed $16 billion in sales last year. However, Murphy does recognize that the retail landscape is changing, which means making bold decisions.
"When you're around 45 years, staying relevant, getting people to stay engaged and generations change. At any given time, could one of our brands not be as hot as it wants to be? It's going to happen," Murphy said. "It's fashion. You've got to take risk. You're going to make some mistakes. But certainly I wouldn't say that as of late."
As to how he plans to keep the American brand relevant to its shoppers, Murphy says he's planning to shift their focus on digital campaigns rather than TV commercials (who could forget the Claire Danes and Patrick Wilson performing in the brand's "boyfriend trouser"?).
"I think to spend that kind of money [on TV ads], you've got to make sure you're really confident in the message you're going to give. I'm proud to announce that we have a new agency. And you'll be seeing us likely on television, but definitely with lots of digital content and a brand new campaign starting September, which we're very excited about," Murphy said, adding, "And we've got a world famous American director who's going to shoot the digital content for us."
Watch the full interview here.