Dive Brief:
- Bank of America bumped its minimum hourly wage from $21 to $22, it announced in a press release Monday.
- The move comes seven months after the Charlotte, North Carolina-based bank lifted its minimum wage from $20 to $21.
- The bank pledged roughly a year ago to boost its minimum wage to $25 by 2025 but is moving at a perhaps faster-than-target pace as rampant inflation and a tight labor market pressure firms to hike salaries.
Dive Insight:
Full-time, U.S.-based Bank of America employees will now take home a minimum salary over $45,000 per year, following the bank’s latest pay hike.
“Our focus on being a great place to work is core to everything we do and underscores the role our teammates play in our success,” Sheri Bronstein, the bank’s chief human resources officer, said in Monday's press release. “We continue to invest in our teammates and their priorities through competitive pay; industry-leading benefits and resources for physical, emotional and financial wellbeing; long-term career development tools and programs; and in our diversity, equity and inclusion efforts across the company, so that we continue to attract and retain the best talent.”
Monday's announcement is not a surprise. The bank has lifted its minimum wage several times in recent years — to $15 per hour in 2017; $17 in 2019; $20 in 2020; and $21 in 2021.
Along with its $25-per-hour pay pledge for 2025, Bank of America last year announced it would require its U.S. vendors to pay employees dedicated to the bank at least $15 per hour.
As inflation surges to the highest levels in decades, firms are pressured to scale wages so employees — particularly those earning less, who are often hit hardest by inflation — can contend with elevated prices.
At the same time, a record number of job openings and resignations in the U.S. economy is forcing employers to boost wages to remain competitive in the ongoing war for talent.
Still, not all companies are raising pay. Some CFOs are letting wages lag inflation betting that, as COVID-19 recedes, sidelined workers will rejoin the labor force, job openings will fall from near-record levels and wage pressure will ease, labor market experts said.
Bank of America doled out restricted bonuses to 97% of its workforce in January. The bank distributed a collective $1 billion in restricted stock bonuses among its rank and file. Employees earning less than $500,000 per year were eligible to receive the shares.
The firm has also elevated base pay for its higher-ranking employees. Bank of America bumped base salaries for managing directors in investment banking and markets from $400,000 to $500,000 last year. The bank also raised pay to $350,000 for directors, to $225,000 for vice presidents and to $160,000 for associates.
