Bank of America is speeding up plans for its next minimum-wage increase as it navigates a tight labor market for financial services workers.
Hourly workers at the Charlotte, North Carolina-based bank will receive a minimum of $22 starting in July, which translates to an annualized full-time salary of $45,000, BofA said in a statement Monday.
The increase from $21 per hour was previously scheduled for October. BofA announced plans last year to increase its hourly base wage to $25 by 2025.
BofA CEO Brian Moynihan said during a CNBC interview Monday that the pay increase is a “response to some pressures” that companies are facing to attract and retain workers in an unusually competitive hiring market. He also noted that inflation and rising interest rates are resulting in higher living expenses.
“Until the labor market eases, the weight of wage growth is going to be strong,” Moynihan said.
The $3.2 trillion-asset bank hired around 7,000 people in the first quarter, according to Moynihan, who said that the higher pay rate will help “stabilize” the company’s workforce as employee turnover reaches “a little bit higher” level than in 2019.
Last year, median hourly wages for bank tellers were around $17, according to data from the U.S. Bureau of Labor Statistics. In April, hourly earnings for all non-farm employees in the United States averaged around $31, according to data from the Federal Reserve Bank of St. Louis.
BofA, which has almost 166,000 U.S. employees, has sought to establish itself as a market leader for paying workers at the lower end of the industry’s wage scale. In 2017, BofA moved hourly workers to a $15 minimum. It announced the increase to $21 per hour last October.
Other banks have also been hiking their minimum wages in recent years. In 2019, New York-based JPMorgan Chase raised its minimum wage to between $16.50 and $20 per hour, while Citigroup, also headquartered in New York, set its hourly pay floor at $15. Last year, BMO Harris Bank in Chicago and PNC Financial Services Group in Pittsburgh each set an $18-per-hour minimum wage.