The US job market remains tight, and banks are struggling to find people who want to work at their branches. That's why Bank of America raises the minimum wage to $ 20 an hour in 2020 – a year earlier than expected.
On Monday, Bank of America said it would raise the minimum wage for its more than 208,000 US employees by the end of the first quarter of 2020. It previously planned to increase paychecks to $ 20 in per hour by 2021, and paid a down payment on that commitment by raising salaries to $ 17 per hour on May 1, 2019.
But the bank backs its timeline and says it wants to share the company's success with its employees.
Two years ago, bank employees received an increase to a minimum of $ 15 an hour, according to a company press release. Higher wages for retail bankers are decisive as the labor market becomes increasingly competitive. In October, unemployment reached 3.6%, staying close to a 50-year low. Wage growth has also been solid.
"Employers are facing the lowest unemployment rate in 50 years, and they feel a significant pressure to increase wages to compete for talent," said Daniel Zhao, senior economist at Glassdoor.
Bank of America is not the first major street bank to increase the minimum compensation for its employees. In June, Citigroup raised the minimum wage in the United States to $ 15 an hour. JPMorgan Chase also announced its intention to raise salaries to a minimum of $ 15 to $ 18 for 22,000 employees depending on local living costs, and pledged $ 18 an hour for employees in Washington, DC, in November.
As employers navigate through these labor shortages, wages for workers with lower incomes grow faster than the national average, Glassdoor data shows. In 2018, bankers saw an average payroll of 10% on Glassdoor.
"These wage increases are happening despite fears of increased automation and the transition to online banking services," Zhao said. "Bank counters play a critical role in the customer relationship, and these pay increases reflect the importance of the company's front line workers in today's tight labor market."
Many other retail companies, including Amazon, Walmart, Target and McDonald's, have announced several recent pay raises, as well as better benefits, for their ranking employees.
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