Bank of America (BofA), which was named the "World's Best Bank" in 2018, will raise the minimum wage for employees to $20 an hour in the next two years. It will also freeze health care cost increases for lower-paid employees.
The wage hike will come in two stages, said CEO Brian Moynihan. The first stage will see hourly pay rise to $17 on May 1 while the second will get to $20 by 2021.
"If you get a job at Bank of America, you'll make $41,000" a year, he said. "With the success our company has ... we have to share that success with our teammates."
BofA is raising its minimum wage "because we believe that to best serve our customers and clients, we need the best teams," said Sheri Bronstein, the company's chief human resources officer.
The higher minimum wage will affect "tens of thousands" of BofA employees, but not contract workers said the bank. BofA farms out a wide range of jobs, from software development to janitorial services. Its contractors are not required to increase the salaries of their workers, but the bank says it goads contractors to pay competitive wages.
The company last raised its minimum wage to $15 an hour in 2016. It noted the average rate for all U.S. hourly employees is significantly above this level.
"It's a good thing to see Bank of America acknowledged that base wages - not metrics and incentives - are the surest way to improve the banking experience and the lives of its workers," said Nick Weiner, organizing coordinator at the Committee for Better Banks, a group that wants to unionize employees at banks.
Employee salaries, however, pale in comparison to salaries made by managers, especially C-suite executives. Moynihan was paid $23 million in 2017, or about 250 times more than the median bank employee, according to BofA data.
The wage increase comes a day before Moynihan, J.P. Morgan Chase CEO Jamie Dimon, and five other bank CEOs are scheduled to testify before the Democrat-led House Financial Services on income inequality.
Pundits said raising wages for the lowest-paid bank workers could insulate Moynihan from criticism about the gap between his bank's tellers and its highest-paid employees.
The House is considering a bill to raise the federal minimum wage from $7.25 an hour to $15 an hour.
