Bank of America has come up with the announcement that they are increasing the minimum wage to $21 per hour. The decision has come in wake of US labor shortage worries. The company is also committed to its plan of increasing the minimum wage to $25 per hour by 2025.
Why Minimum Wage is Increased?
US is facing a country wide labor shortage in all its employment sector. Companies are finding it difficult to hire and retain employees. The biggest challenge is the retention of lower wage employees. To cater this issue companies are offering increased salaries to attract potential candidates. Bank of America is also in the list of employers who has increased the minimum wage rate. They are now offering approximately 3 times higher wage as compared to US minimum wage of $7.25 per hour. With this wage hike, employees of this segment will have an annualized salary of $43,680. This is well above the average poverty line of $12,880 per person and $26,000 for a family of four.
Bank of America and its Competitors
Like many other sectors, banks are also severely affected by shortage of workers. However, this decision has placed Bank of America ahead of its competitors in terms of minimum wage offering. JP Morgan which is the largest bank in US are offering minimum wage of $16.5 to $20 per hour. Citigroup are offering $15 per hour as minimum wage. Wells Fargo are paying its employees between $15 to $20 per hour depending upon the area’s cost of living.
The US economy managed to add 194,000 jobs during September 2021. There are approximately a million more jobs than the available workforce. In order to tackle this crisis companies are offering higher wages to hire and retain employees. In recent times, companies like Amazon and Walmart have increased their minimum wage. Now, The Bank of America has also decided to come up with this strategy to hire and retain employees.
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