Bank of America said Tuesday that it would raise its minimum wage to $20 an hour by 2021, a move that comes a day before banking industry leaders are scheduled to be grilled on Capitol Hill on their record profits a decade after the financial crisis.
The pay increase will affect all of the Charlotte-based bank’s more than 200,000 employees, the bank said.
“If you get a job at Bank of America, you’ll make $41,000” a year, Brian Moynihan, the company’s chief executive, told MSNBC. “With the success our company has . . . we have to share that success with our teammates.”
Bank of America’s announcement comes as Democratic lawmakers push legislation to raise the federal minimum wage to $15 per hour and a tight labor market has left some employers struggling to find enough people to fill their ranks.
“The job market is very healthy, and this is one way to help employee retention,” Ken Leon, director of equity research at CFRA Research, said of Bank of America’s announcement.
The bank’s announcement may also be part of another fundamental industry shift, banking analysts said. Big banks are hiring fewer low-wage employees such as bank tellers and shifting to higher-paid skilled workers as part of a push into digital banking, analysts say.
Earlier this year, JPMorgan Chase announced that it would be raising its minimum wage to between $15 and $18 an hour for 22,000 employees. Wells Fargo raised its minimum wage to $15 an hour.
Bank of America announced two years ago that it would begin raising its minimum wage to $15 an hour. Now it says wages will reach $17 an hour in May and then increase incrementally until it hits $20 an hour.
Moynihan is scheduled to appear before the House Financial Services Committee Wednesday along with the leaders of six other big financial institutions — JPMorgan Chase, Morgan Stanley, Goldman Sachs, Citigroup, State Street and Bank of New York Mellon. The executives are expected to be questioned by House Democrats about the safety of the financial system, whether big banks should be broken up, and their financing of private prisons and gun manufacturers.
The CEOs are also expected to face tough questions about the Trump administration’s efforts to roll back financial regulations despite record industry profits. Bank of America, for example, reported a profit of $28 billion last year and increased the dividends it paid to shareholders. Moynihan made $26.5 million in 2018, a 15 percent increase from the previous year and a record for the company.
The industry has defended its track record, saying banks are financially healthier and better run than before the financial crisis. “The financial crisis was an incredibly difficult period for our country and our firm,” Goldman Sachs CEO David Solomon is scheduled to tell the committee, according to his prepared testimony. Because of financial reform, “today the U.S. financial system is substantially safer and more resilient against failure or disruptions.”