Video source: YouTube, Bloomberg Markets and Finance
By Noor Hussain
Bank of America plans to raise its minimum wage for U.S. workers to $25 per hour by 2025, the latest among major firms promising to pay employees more after a year of pandemic risks and government subsidies that fueled conversations on whether companies pay their workers enough.
Bank of America's announcement on Tuesday went further than other companies with large U.S. workforces in the retail space. The figure was higher than at competitors, and the second-largest U.S. bank is also requiring its vendors to set a minimum wage of $15 per hour.
That could help spread the influence of higher wages to smaller companies that have lucrative contracts to provide services like marketing, technology services and maintenance. Bank of America deals with more than 2,000 U.S. vendors and 43,000 vendor employees.
Bank of America already pays its U.S. workers at least $20 per hour and is boosting that figure to attract the best and brightest, Sheri Bronstein, its chief human resources officer, said in a statement.
"Our commitment to being a great place to work … means investing in the people who serve our clients," she said.
The news comes as the country is grappling with a fierce debate over worker rights and compensation, especially for those who had to contend with COVID-19 risks during the pandemic.
McDonald's Corp last week laid out a plan to pay employees 10% more, on average, at company-owned locations. Those 660 stores do not include the many McDonald’s franchises. The company’s move came after a planned worker strike over low wages was reported by media outlets. read more
Others, including Walmart Corp, Starbucks Corp, Amazon.com Inc and JPMorgan Chase & Co, have also outlined plans to boost wages.
Their employees, as well as those at grocery stores and health-care centers, kept working through most of the pandemic, facing risk of infection as dozens or hundreds of customers passed through their workplaces every day.
Companies have sometimes been prodded to boost wages by employee complaints that spill into the public sphere. But there are also political pressures and a competitive reality in which one big company outlines a higher pay scale and others follow suit.
The current minimum wage at the federal level is $7.25 per hour, enacted more than a decade ago. President Joe Biden is pushing Congress to pass a $15 minimum wage as part of another pandemic rescue package.
It is not clear whether $25 per hour will seem as hearty in 2025 as it does now, given the trajectory of wages in recent years. Health-care benefits, paid time off and parental leave have also become competitive factors.
Source: Reuters, Bloomberg Markets and Finance