Low bank wages costing the public millions, report says
By Danielle Douglas,
Almost a third of the country’s half-million bank tellers rely on some form of public assistance to get by, according to a report due out Wednesday.
Researchers say taxpayers are doling out nearly $900 million a year to supplement the wages of bank tellers, which amounts to a public subsidy for multibillion-dollar banks. The workers collect $105 million in food stamps, $250 million through the earned income tax credit and $534 million by way of Medicaid and the Children’s Health Insurance Program, according to the University of California at Berkeley’s Labor Center.
The center provided the data to the Committee for Better Banks, a coalition of labor advocacy groups that published the broader study, to be released Wednesday, on the conditions of bank workers in the heart of the financial industry, New York. In the that state alone, 39 percent of tellers and their family members are enrolled in some form of public assistance program, the data show.
“This is the wealthiest and most powerful industry in the world, and it’s substantially subsidized by our tax dollars, money that we could be spending on child care or pre-K,” said Deborah Axt, co-executive director at Make the Road New York, one of four coalition members.
Profits at the nation’s banks topped $141.3 billion last year, with the median chief executive pay hovering around $552,000, according to SNL Financial. In contrast, the U.S. Bureau of Labor Statistics pegs the median annual income of a bank teller at $24,100, or $11.59 an hour.
For its report, the committee spoke with 5,000 bank tellers, customer service representatives and technicians about their pay, benefits and treatment in the workplace. Workers bemoaned their poor wages and long hours without overtime pay.
Alex Shalom, 20, works part time at a Bank of America branch in Manhattan, where he makes $13.50 an hour, or $14,000 a year. The pay is barely enough to pay rent and cover his tuition at Hunter College, Shalom said.
“It’s not a livable wage,” he said. “Bank of America is making all of this money . . . but we’re not getting paid for holidays.”
Another common complaint among bank workers was the intense pressure to meet sales quotas. One Wells Fargo employee, Victoria, who would only give researchers her first name, claimed she received more than 50 e-mails a day from managers pushing sales goals. Employees, she said, had to aggressively peddle products “just to be able to keep our jobs.”
Wells Fargo spokeswoman Richele Messick said: “Wells Fargo works hard to create a positive work environment for our team members and a culture of doing what is best for our customers.”
Although banks have rebounded from the depths of the recession, analysts say they are still contending with economic headwinds that are placing pressure on revenues. As a result, they say, institutions may be less inclined to raise wages and maintain full-time staff.
“The interest-rate environment is very unfavorable to banks. There is an increasing amount of regulation that has further squeezed profit margins,” said Greg McBride, senior financial analyst at Bankrate.com. “When margins are tight and you’re looking for maximum efficiency, you have to make tough decisions.”
The committee’s report arrives as fast-food workers, retail employees and other low-wage workers stage strikes across the country, including one planned for Thursday. They are fighting to have their pay raised to $15 an hour and for an easier path to forming unions.
“As this low-wage policy spreads beyond fast food into banking and other sectors, it makes it much tougher for the economy to grow,” said Gregory DeFreitas, an economics professor at Hofstra University. “People are scrapping by on so little, so the demand for products remains low and the broader economy is hurt.”
Committee for Better Banks organizers say they are in the early stages of their fight and trying to make the public aware of workplace conditions. The release of the report Wednesday will kick off a week of events, including a rally in front of a Bank of America branch to protest the increasing reliance on ATMs with videoconference tellers.
The bank stepped up the use of remote video tellers in the past year, raising concerns that the machines would eliminate branch workers.
Officials at Bank of America declined to comment, but in the past the bank has said that the technology is meant to supplement, not replace, its branch employees.