Bank of America is raising its minimum wage to $20 an hour early next year in a move that lifts pay for tens of thousands of workers and highlights both its profitable business and the tight U.S. labor market.
BofA, the nation’s second-biggest bank by assets, had planned to boost its base U.S. hourly rate for 22,000 workers from $17 to $20 an hour by 2021. But the company said this week it has decided to increase its baseline pay roughly a year earlier.
“We are saying thank you, and sharing our success with our teammates who serve our clients and communities every day,” Sheri Bronstein, BofA’s chief human resources officer, stated in a news statement.
Since 2010, BofA has increased its minimum age by more than $8 an hour, according to the company, which employed nearly 170,000 people in the U.S. last year.
The company said last week it would pay employees special bonuses for a third consecutive year after tallying record earnings in four of the past five quarters. In October, BofA reported third-quarter revenue of $7.5 billion, and in 2018 earned a record $28.1 billion on revenue of $91.2 billion.
The promise of more pay comes as banks jockey to fill teller and other positions in their branches amid an increasingly competitive labor market. The U.S. unemployment rate in October held near a 50-year low of 3.6%, while more Americans have sought to find work.
Other main street banks have also hiked pay for rank-and-file workers, but none in the top tier other than BofA have committed to $20 an hour as a minimum. Citigroup raised its minimum wage to $15 an hour in June after U.S. Representative Maxine Waters of California, chair of the House Financial Services Committee, called on the nation’s third-biggest bank to commit to increasing its minimum pay to $20 an hour.
The country’s largest bank, JPMorgan Chase, raised its minimum wage to a range of $16.50 to $18 an hour for 18,000 employees, depending on the local cost of living, and Wells Fargo hiked its minimum wage to $15 an hour.
The wages of low-paid bank workers had JPMorgan CEO Jamie Dimon on the defensive in recent months, with the executive grilled at a congressional hearing on how a minimum-wage employee at JPMorgan in California could cover basic expenses.
Retailing and fast-food giants including Amazon, Walmart and McDonald’s have also hiked hourly pay in a bid to attract and retain qualified workers. The companies have also faced public pressure from the “Fight for $15” movement and from politicians including Bernie Sanders, Elizabeth Warren and other Democratic presidential candidates.
An analysis by the Institute for Policy Studies, a left-leaning think tank, found that if the minimum wage had grown at the same pace as Wall Street bonuses, fast-food workers and other low-wage workers would earn a baseline wage of $33.51 an hour.
BofA CEO Brian Moynihan’s 2018 compensation was 247 times more than the total pay of the bank’s median employee, according to the company’s annual proxy filing. Moynihan, CEO since 2010, received total compensation of $22.8 million last year, which includes stock awards and health insurance benefits. That compared with $92,040 for the median employee, according to the filing.
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