Bank of America said Tuesday that it would raise its minimum wage to $20 an hour by 2021.The pay increase will affect all of the Charlotte-based bank’s more than 200,000 employees.“If you get a job at Bank of America, you’ll make $41,000” a year, Brian Moynihan, the company’s chief executive, told CNBC. “With the success our company has . . . we have to share that success with our teammates.”
Though I am all for hard working Americans(especially minority workers) getting a wage increase, the banking giant may not be doing this out of some “goodwill” agenda as they claim. Big banks are hiring fewer and fewer low-wage low skilled workers as industry moves closer and closer to a more digitalized financial service industry. In addition, it’s becoming an increasing tighter labor market where employers are struggling to find skilled workers to fill their open positions. And the best way to steal and draw employees to your company is to offer higher wages and better benefits.
But these higher wages could be a precursor to downsizing and fewer positional offerings overall. The thing about technological advancements and digital shifts, they often come at the expense of human filled positions. If banking institutions are going to have more digitalized branches the need for tellers and relationship banker will lessen; you will see fewer branches because a singular branch will be able to
accommodate so many of the financial needs of the customer.
So although this initial announcement should be championed and celebrated, I would also keep an eye out for any hidden repercussions that might accompany it. Another consequence to be weary of is if consumer food brands start to increase their pricing to either compensate for their own wage increase offerings or just to capitalize on the increase wages earning of these select group of workers. Either eye I advise keeping an cautionary eye on the effects of it all!
Jamaal W Vetose
Todd Capital Investment