Bank of America announced Tuesday it will raise the minimum hourly wage for its employees to $25 by 2025.
The banking giant based in Charlotte, North Carolina, is the latest U.S. corporation to increase the minimum wage paid to its workers as the country rebounds from the COVID-19 pandemic that caused massive layoffs last year.
Governors in at least 10 states have said they will no longer accept the federal government’s enhanced unemployment program that includes $300 for weekly benefits. Many of those states’ Republican leaders contend the extra federal cash has incentivized low-wage workers to make more money not working as some employers say they are having difficulty finding labor.
Bank of America raised its U.S. minimum wage in March 2020 to $20 per hour, and the company said it will require all of its U.S. vendors to pay their employees whose work is dedicated to the bank at least $15 an hour.
Sheri Bronstein, Bank of America’s chief human resources officer, said the company wants to provide “strong pay and competitive benefits” to help employees’ families and to attract and retain the best talent.
“A core tenet of responsible growth is our commitment to being a great place to work, which means investing in the people who serve our clients,” Bronstein said.
In April, the bank posted a first-quarter profit of $8.1 billion, which far exceeded Wall Street estimates.
The bank increased its hourly minimum wage from $15 to $17 an hour in 2019.
At $25 a hour, a full-time employee working 40 hours a week would earn $52,000 annually. That’s a 25% increase from the company’s current minimum wage, which translates to $41,600 a year in pay.
Bank of America, like many banks, has cut its operating hours for customers; some branches close at 4 p.m. weekdays.
The bank has approximately 66 million consumer and small-business clients and 4,300 retail financial centers.
Bank of America’s minimum wage is nearly three times higher than the federal minimum wage of $7.25 an hour.
A government report in February by the nonpartisan Congressional Budget Office concluded that boosting the minimum wage to $15 per hour would raise income for millions of Americans and lift 900,000 people out of poverty.
By 2025, when the federal hourly rate would hit $15 under a proposal before Congress, about 1.4 million fewer Americans would be working, the report said. That is because higher wages would increase the cost of producing goods and services, and in response, many employers would reduce their workforce or hire fewer employees, the report said.