JPMorgan Chase has promised to lift basic hourly pay for 18,000 of its lowest paid US workers by at least a fifth by 2019.
The bank’s move is in line with a nationwide movement known as “Fight for $ 15”, which calls for a raise to $ 15 an hour for the 42 per cent of the American workforce that earns less.
The cities of San Francisco, Seattle and Los Angeles have enacted gradual increases of their minimum wages to that level, while in New York state, governor Andrew Cuomo is seeking legislative support to raise the wage there to $ 15 by July 2021. California may vote on a similar proposal in November.
“A pay increase is the right thing to do,” wrote Jamie Dimon, chairman and chief executive of JPMorgan, in an opinion piece published in the New York Times on Tuesday. “Wages for many Americans have gone nowhere for too long. Many employees who will receive this increase work as bank tellers and customer service representatives. Above all it enables more people to begin to share in the rewards of economic growth.”
The move puts Mr Dimon at the centre of a debate over pay in the US. The argument pits those who say that workers need higher salaries to boost their living standards against those who believe that companies cannot afford to put up pay.
Profits at the big US banks have been under pressure in recent years, squeezed by ultra-low interest rates and the effects of turbulent markets. Just one of the biggest six — Wells Fargo — is expected to make a double-digit return on equity, according to analysts’ forecasts.
Until now, big banks have mostly shied away from the low pay debate — even as pay for top executives has spiralled — allowing much smaller lenders to take up the cause. In August 2015, Amalgamated Bank, the largest union-owned lender in the US, raised pay for workers to a minimum of $ 15 an hour — well clear of the hourly median for tellers of $ 12.70, according to the US Bureau of Labor Statistics.
Of the nearly 1.7m people working in retail banking in the US, almost one-third — more than 500,000 people — are in jobs with median hourly wages below $ 15, according to a 2014 government study.
JPMorgan’s minimum wage is currently $ 10.15 an hour (plus benefits), about $ 3 above the current national minimum.
Over the next three years, the bank will raise that pay for 18,000 employees to between $ 12 and $ 16.50 an hour for full-time, part-time and new employees, depending on location and division.
Rob Nichols, head of the American Bankers Association, described Mr Dimon’s op-ed as “timely” and “extremely thoughtful”, noting that the JPMorgan chief had acknowledged not all businesses could afford to put up wages.
“I’m so glad that Jamie Dimon has followed the lead of Amalgamated Bank,” said Keith Mestrich, chief executive of the New York-based bank, which has about $ 4bn in assets. The bank has been vocal about its drive to push up wages, recently paying for a four-week advertising campaign on the city’s subway.
“Kudos to JPMorgan for doing the right thing; now it’s time for Citi, Goldman Sachs and all the rest. If the largest bank in the country can figure out how to do it, to give a modest increase to the people who work the hardest, then they surely can too,” said Mr Mestrich.