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Wal-Mart faces its Ford moment

Companies including Gap Inc. and Wal-Mart Stores Inc. are caught up in the debate over raising pay.

By Renee Dudley, Jeanna Smialek, Shobhana Chandra | Updated on February 21, 2014
Colorado Walmart employees and supporters join nationwide protests, in front of a Walmart store in Lakewood, Colo. (AP Photo/Brennan Linsley)

Feb. 21 (Bloomberg) — In 1914, Henry Ford announced he was more than doubling the average wage of Ford Motor Co. factory workers to $5 a day, in part so they could afford a Model T. His act took the world by surprise, spurred auto sales and helped create an American middle class.

One hundred years later, U.S. companies including Gap Inc. and Wal-Mart Stores Inc. are caught up in the debate over raising pay — this time an increase in the federal minimum wage. President Barack Obama and Senate Democrats want to raise it to $10.10 an hour from $7.25, saying doing so will bolster the economy and reduce income inequality. House Republicans and industry groups oppose the plan, deeming it a job killer.

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