In a New York Times op-ed published on Tuesday, JPMorgan Chase CEO Jamie Dimon revealed that the bank would raise the minimum wage of its retail banking employees from $10.15 today to between $12 and $16.50, “depending on geographic and market factors,” over the next three years:
A pay increase is the right thing to do. 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. And it’s good for our company, helping us attract and retain talented people in a competitive environment. While businesses, including ours, are understandably cautious when it comes to expenses, there are good expenses (investments that will pay off in the long run) and bad expenses (waste and inefficiencies). We have never hesitated to invest aggressively if we thought it would improve our long-term prospects.
While a higher wage is important, so are benefits. Our lower-compensated employees receive a medical plan — subsidized up to 90 percent by the company — as well as dental, vision and other coverage. Many of these and other benefits, including a 401(k), pension, a special annual award, paid family leave, paid vacation and bereavement, have been increased in recent years. In total, the annualized value of all of our benefits for these employees is on average approximately $11,000 a year above their existing wages.
It is true that some businesses cannot afford to raise wages right now. But every business can do its part through whatever ways work best for it and its community.
Dimon’s announcement comes as other large employers are moving to raise wages for their lowest-paid staff.
On Monday, Starbucks CEO Howard Schultz announced that the coffee chain would raise wages for all US store employees and managers by at least 5 percent, in addition to expanding its stock award program and overhauling its benefits plans to allow employees more personalized health insurance options. According to Fortune, some 150,000 employees stand to benefit from these changes. Other organizations have made similar moves recently, such as Allstate, which rolled out a $15 wage floor for its US corporate employees in May. Walmart, the nation’s largest private employer, also raised wages for its store employees earlier this year.
As Dimon notes, raising wages is primarily a way to improve retention and engagement in a competitive talent market, but these employers may be responding to shifting political tides as well: Several US cities, as well as New York State and California, have voted to raise their minimum wages in the past year, while the Democratic Party amended its platform this weekend to back a $15 minimum wage at the federal level.