On Tuesday, JPMorgan Chase announced that it would increase its minimum wage for over 18,000 employees in the U.S. over the next three years. The decision comes following political pressure and moves by certain states to increase pay for lower level workers.
The increase in wage as the largest bank in the U.S. will be from its current floor rate of $10.15 per hour to a new range of between $12 and $16
.50 per hour. Jamie Dimon the CEO wrote a New York Times op-ed article explaining the increase.
In his article, he added that too many are not receiving a fair chance to get ahead. In 2015, Dimon received over $27 million in total compensation. He added in his article that employers must find ways of helping the less fortunate move up the country’s economic ladder.
The gap between enter-level employees pay is and that of top executives is widening at an extremely fast rate. It has also become a big political issue across the U.S. during an election year.
Democrats last week moved toward an increase in the country’s minimum wage in their party platform for 2016.
The current federal minimum wage in the U.S. is $7.25 per hour. A movement known as Fight for $15 is using protests across the country to demand a national minimum wage of $15.
California has decided this year to increase its minimum wage to $15 by 2023, while New York announced it would hike it eventually to the same rate in New York City along with surrounding areas.
Dimon said that bank raises would vary on market and geographic factors.
The employees who included a number of tellers at branch offices as well as customer services reps, already have benefits like medical insurance that is worth on average $11,000 per year, said Dimon.
This pay increase comes at a time when JPMorgan as well as other banks are facing pressure from their investors to cut operational costs as the interest rates are holding down overall revenue.
A tightening of the labor market in the U.S. has also started to encouraged companies to increase the pay of employees. This week Starbucks announced that it would be increasing the remuneration of staff by 5% to 15%.
The move by Starbucks came after some of its employees accused the chain of coffee houses of carrying out extreme cutbacks of work hours for many.