Bank of America boosting its hourly minimum wage to $25 by 2025
The nation's second largest bank will pay its employees a minimum hourly wage of $25 by 2025.
Bank of America said its $25-an-hour pledge means employee wages will have grown 121% since 2010, back when the hourly rate was $11.30. Increasing the minimum wage helps Bank of America recruit new talent, human resources chief Sheri Bronstein said in a statement Tuesday.
The Bank of America raises are coming months after the company reported almost $18 billion in profit last year during the coronavirus pandemic and $8 billion in profit so far this year. It is poised to grow profits even further in coming months as more pandemic restrictions are lifted, CEO Brian Moynihan said last month during the bank's annual shareholder meeting.
"A core tenet of responsible growth is our commitment to being a great place to work, which means investing in the people who serve our clients," Bronstein said in a statement about the wage increase. "That includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent."
Our employees are the heart of our commitment to make financial lives better for our clients & communities. We are raising our U.S. minimum wage to $25/hour by 2025 and also requiring our U.S. vendors pay employees dedicated to the bank, at or above $15/hr https://t.co/zXCL3wlYqV pic.twitter.com/mWRpJiiZIR
— Bank of America News (@BofA_News) May 18, 2021
Bank of America said it's also requiring the vendors it partners with to pay their employees at least $15 an hour. Most of Bank of America's 2,000-plus existing vendors already meet that criteria, the company added.
Moynihan told CNN on Tuesday that raising the hourly wage builds loyalty and devotion among employees but also comes at a high price tag.
"It costs us a few hundred million dollars a year ... but it's an investment," Moynihan told CNN. "The key is for big companies like ours to set a standard."
Bank of America said it increased the minimum hourly wage to $15 in 2018, then to $17 in 2019 and $20 in 2020.
The company's two biggest competitors — JP Morgan Chase and Wells Fargo — pay their employees hourly minimums of between $16.50 and $18 and between $15 to $20, respectively. Employees get the higher wage if they live in high-cost of regions like New York City, northern Virginia or the Bay Area of California, Chase and Wells Fargo said.
Bank of America is the latest in a short list of companies that have raised employee wages in recent weeks. The moves followed stalled attempts in Congress to increase the nation's $7.25 minimum wage — last raised in 2009 — to $15 an hour over the next few years.
Amazon said last month that more than 500,000 employees will get hourly raises between 50 cents and $3, starting this week. Amazon workers earn a minimum $15 an hour.
McDonalds said this month that hourly wages at company-owned restaurants will increase an average of 10% over the next few months, to $13, and rise to $15 by 2024. Entry-level workers will make at least $11 an hour, while shift managers will make at least $15 per hour, the company said.
Only about 5% of McDonald's nearly 14,000 restaurants in the U.S. are company-owned, but McDonald's hopes its corporate move will inspire its thousands of franchisees to up their local pay scales in response.
Chipotle Mexican Grill also said this month its typical worker's pay will increase by about $2 an hour by the end of June. The starting wage of $11 to $18 an hour will average out to $15 an hour, the food chain said.