How Bank of America Minimum Wage Compares to Other Banks

The Bank of America (BoA) announced on Tuesday that it will raise the minimum wage for its U.S. employees to $25 an hour by 2025.

The bank, which is headquartered in Charlotte, North Carolina, also announced that it will require its vendors across the country to pay employees at least $15 an hour, more than double the national minimum rate of $7.25.

This move will affect the companies' 2,000 vendor firms across the U.S., which currently employ around 43,000 people. The bank confirmed on Tuesday that around 99 percent of the firms are already paying employees the $15 an hour rate.

Speaking to CNN's Poppy Harlow on Tuesday, BoA CEO Brian Moynihan said that the bank made the decision to raise its minimum wage as part of a commitment to maintaining a "great standard of living for our teammates," explaining that "It costs us a few hundred million dollars a year .. but it's an investment.

"The key is for big companies like ours to set a standard. We think it's part of sharing our success with our communities."

BoA, the second-largest U.S. lender, has now more than doubled its minimum wage from 2010 after increasing the rate to $17 an hour in 2019 and then again to $20 in March 2020.

All four of the country's largest banks have raised their minimum wage for employees since 2019, but BoA is currently the only lender to have publicly committed to a figure of $25 an hour.

In 2019, JPMorgan Chase & Co, the largest U.S. lender, increased its minimum wage to between $16.50 and $20 an hour with the exact amount depending on the cost of living in each area. Employees in Washington, D.C. are paid a minimum of $18 an hour.

Speaking about the decision in 2019 during an interview with Yahoo! Finance, the bank's CEO Jamie Dimon said: "We've got to give people more of a living wage," and confirmed that "we look at it every year and decide how we're going to compete or not."

While in a shareholder letter in April 2019, Dimon voiced his support for raising the minimum wage for all U.S. workers, writing: "Forty percent of American workers earn less than $15 an hour, and about 5 percent of full-time American workers earn the minimum wage or less, which is certainly not a living wage."

In March 2020, Wells Fargo & Co, the third-largest U.S. lender, announced that it would raise its minimum wage by the end of the year to between $15 to $20 an hour, with the exact number depending on the area that employees are based.

The pay increase affected the bank's 20,000 employees, with CEO Charlie Scharf explaining in a statement to accompany the announcement: "Companies have an obligation to help communities and employees reach their potential.

"Our employees are our most valuable resource, and these pay increases are just one way we are investing in our people and ensuring that Wells Fargo continues to be a great place to work."

Wells Fargo employees based in areas such as New York and San Francisco are paid a minimum wage of $20 an hour, while workers in places including Des Moines, Iowa, and Charlotte, North Carolina, receive a minimum of $16.

Although Citigroup, the fourth-largest U.S. lender, also modified its minimum wage in 2019, it only increased it to $15 an hour.

The increase took effect in June 2019, but is only in place for the bank's U.S. workers, who make up just one-third of the companies' workforce of around 200,000 people.

Speaking to CNN at the time of the increase, a spokesperson defended the bank's minimum wage, explaining that its average hourly pay is $23.89 an hour.

The decision to raise BoA's minimum wage followed an executive order signed by President Joe Biden in April, which will increase the rate for federal workers from $10.95 to $15 an hour by 2022.

Other large companies in the U.S., including McDonald's and Amazon, have also recently announced that they will increase pay for workers to attract more employees as the country reopens post the COVID-19 pandemic.

Newsweek has contacted BoA, JPMorgan, Wells Fargo and Citigroup for comment.