Bank of America announced on Tuesday it is raising hourly wages for its lowest-paid U.S. employees starting next month, with the figure rising to $20 in two years.
The Charlotte-based bank said its minimum wage will rise from slightly higher than $15 an hour to $17 an hour on May 1. The minimum will continue to rise until hitting $20 an hour in 2021, the bank said.
The company, which has about 15,000 workers in Charlotte, said the increase is part of its commitment to be a great place to work and offer competitive benefits. The company said it employs more than 205,000 people worldwide.
“We are raising our minimum wage because we believe that to best serve our customers and clients, we need the best teams,” Sheri Bronstein, chief human resources officer, said in a statement.
CEO Brian Moynihan, speaking to MSNBC on Tuesday, said the increase means workers joining the bank will earn at least $41,000 a year. Bank of America has also frozen health care cost increases for lower-paid employees, Moynihan told MSNBC.
The wage increase will affect tens of thousands of Bank of America employees across the U.S., according to the bank.
Many of the employees who will receive the increases work in the bank’s consumer business, including some tellers, but also in technology, operations and staff-support roles, among other areas, the bank said. Some of the positions might require college degrees.
Bank of America’s increase was praised Tuesday by Charlotte-based Leading on Opportunity, a group that grew out of a 2014 study from Harvard University and UC-Berkeley. That study showed poor children in Charlotte are less likely to escape poverty compared with their peers in America’s 50 largest cities.
“We encourage others to follow suit — financial, government, philanthropic and nonprofit, etc. — in our commitment to reduce poverty’s impact and build a stronger, vibrant region for all,” Stephanie Kripa Cooper-Lewter, the group’s executive director, said in a statement.
Bank of America’s decision will have a tremendous impact on Charlotte’s economy, said Ana Pardo, policy advocate with the N.C. Justice Center, a Raleigh nonprofit that advocates for low- and middle-income families.
Pardo noted, though, that the U.S. and the South in particular have seen wages stagnate since the 1970s as manufacturing and other good-paying jobs have been replaced with lower-paying service sector jobs. “It very much feels like what’s needed is more of a systemic improvement in base wages for all North Carolina workers,” she said.
According to the U.S. Census Bureau, the median household income in Mecklenburg County was $61,695 in 2017.
Other pay hikes
Tuesday’s announcement marks the latest increase that Bank of America has made to the pay for its lowest-paid workers.
In 2016, Moynihan announced plans to raise minimum pay to $15 an hour. That change, which took effect in 2017, increased the figure from $13.50. Since 2010, Bank of America’s minimum wage has increased by more than $4 per hour, the bank said on Tuesday.
Other big U.S. banks have also increased their minimum wages in recent years to compete with one another.
For instance, Wells Fargo, which is based in San Francisco but has its largest employment hub in Charlotte, raised its minimum base pay in the U.S. to $15 an hour last year, up from $13.50 previously. That move benefited approximately 36,000 employees, Wells has said.