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Gap to raise hourly pay to US$10 in 2015

Apparel retailer Gap Inc said it would raise the hourly pay for its U.S. employees to US$9 in June 2014 and US$10 in June 2015, after the White House said the minimum wage for federal contract workers would be raised to US$10.10 an hour in 2015.

Gap, owner of Old Navy, Banana Republic and Gap apparel chains, said the increased pay will benefit about 65,000 store employees.

"I applaud Gap for announcing that they intend to raise wages for their employees beginning this year," U.S. President Barack Obama said.

Separately, Wal-Mart Stores Inc, the largest private employer in the United States, said it remains "neutral" on the issue of the federal minimum wage order of at least US$10.10 per hour as it already pays most full-time employees above that level.

"We are looking into the impact that this proposal will be on our business," Wal-Mart spokeswoman Brooke Buchanan told Reuters on Wednesday. "We remain neutral. Our position has not changed."

She said an earlier Bloomberg report that the world’s largest retailer was "looking at supporting" an increase in the federal minimum wage was inaccurate. 

"Wal-Mart is not a minimum wage business. Ninety-nine per cent of our hourly associates, people working in stores earn above the state and federal wage," Buchanan said.

Obama said last week he would sign an executive order to raise the minimum wage for federal contract workers starting next year.

The order applies to new contracts and replacements for expiring contracts.

Wal-Mart is expected to report fourth-quarter results on Thursday.