Gap will raised the hourly wage for its U.S. employees to $10 by next year in an effort to "do more than sell clothes."
The retailer, which also owns Old Navy and Banana Republic, said it would raise pay to $9 this year and another $1 next year for its 65,000 store employees, CEO Glenn Murphy announced Wednesday.
"The people in our company who engage directly with our customers carry an incredible responsibility," Murphy said. "Our success is a result of their hard work, love of fashion and commitment. We hope this decision provides them with some additional support as they grow their careers with Gap Inc."
President Barack Obama, who has been pushing for a hike in the national minimum wage to $10.10, praised Gap's decision.
"In my State of the Union address, I asked more businesses to do what they can to raise their employees' wages," Obama said in a statement. "I applaud Gap Inc. for announcing that they intend to raise wages for their employees beginning this year."
"Winning companies in our industry are competing for talent every day,"said Jack Calhoun, global brand president of Banana Republic. "If I can attract and retain the best people in the industry, then I'm going to win, and if I win, our customer wins. There's a competitive advantage that we have as Gap Inc. by doing this."
Original headline: Gap hourly wage earners get a raise
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