Bank of America is raising minimum wage for workers
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Bank of America will raise its minimum wage to $24, the latest corporate giant to raise the floor on pay to attract and keep workers.
Why it matters: It's the latest large firm to promise higher entry-level pay in an effort to attract and keep workers.
Driving the news: The pay bump is part of a previous pledge to have company-wide hourly pay of at least $25 in 2025.
- The $1 minimum wage increase, effective in October, applies to workers across its consumer business: bank tellers, call center workers and more.
What they're saying: "Our projections for the economy is for it to bump around at a 2% level and that would be consistent with this kind of wage growth for us as a company," Bank of America CEO Brian Moynihan tells Axios in an exclusive interview.
Flashback: Bank of America was early among peers to raise pay for its lowest-paid workers.
- In 2019, the bank said it would pay $20 per hour, at minimum. The following year it hiked pay by $3 per hour to meet that goal.
- That helped set off something like a minimum pay-hiking frenzy, with some big bank rivals following suit.
Moynihan says even if the economy slows further or enters a recession, the bank would still meet that $25 target.
- "It's become a little bit of a philosophical point of view in the company," Moynihan said of the minimum wage raises. "The payback is lower turnover."
What to watch: "There have been a lot of companies that have pushed way beyond what federal, state law requires," Moynihan says.
- "As a practical matter, there's a minimum wage driven by the market, which is much higher than the mandated levels by far."
The intrigue: Congress raised the minimum wage to $7.25 in 2009, with no further increases since.
- Most states mandate that companies pay wages above the federal minimum. Companies have also rapidly raised pay in recent years to lure lower-wage workers most in demand in recent years.
- States that do follow the federal minimum wage, including Mississippi and Texas, have an outsized share of low-wage workers compared to the rest of the nation.
