This week, Bank of America announced it has raised its U.S. minimum hourly wage to $21 and plans to increase it to $25 by 2025. Last year, the bank raised its lowest hourly wage to $20, up from $17.
With the increase to $21 an hour, the annualized minimum salary for full-time workers at Bank of America will be $43,680.
In May, the company announced that all of its U.S. vendors are now required to pay their employees whose work is tied to Bank of America at or above $15 per hour.
The current federally mandated minimum wage for private-sector workers is $7.25 per hour, enacted more than a decade ago. The Biden administration and Democrats in Congress are pushing for a $15 national minimum wage, while many states and localities are raising their own mandatory minimum wage levels.
SHRM Online has collected the following articles on rising minimum wage rates at U.S. employers.
Walmart to Increase Wages, End Quarterly Bonuses
Walmart increased hourly wages for hundreds of thousands of its employees as of the end of September. The retailer raised its starting wage to $12 from the $11 floor established in 2018, a move that increases pay for over 525,000 of its 1.6 million U.S. workers by at least $1 an hour. Walmart workers will earn an average of $16.40 an hour, the company said.
Walmart also said it was phasing out its quarterly bonuses for store workers, ending a decades-old practice of offering hourly workers financial incentives directly linked to store or company performance—a practice championed by Walmart founder Sam Walton. Folding the bonus into wages will increase the amount of workers' consistent, predictable income, the company said.
(Wall Street Journal)
What Amazon's $18 Average Hourly Wage Means for Other Employers
Amazon is raising its average hourly U.S. wage to $18 an hour for warehouse workers, the company said in September, putting more pressure on other employers to do the same in a tight labor market. Just four years ago, the online retailer increased its starting wage to $15 an hour.
The new wage standard from the U.S.'s second-largest private employer—Amazon trails only Walmart in the size of its employee base—puts pressure on competitors to raise pay. That's not just among national employers like Walmart and Target but also locally. Ahead of the holiday season, wage inflation is creating a real challenge for smaller businesses that are struggling to find workers.
Big Companies Raising Their Minimum Wages
Many large corporations criticized for underpaying their staff are now upping their offerings in hopes of attracting more workers. That means hourly-wage jobs are being boosted to pay levels never seen before.
Costco, which introduced a $15 per hour starting pay in 2019, now pays all employees a starting wage of $16 an hour. More than half of its hourly workers are paid above $25 an hour.
Chipotle reached an average hourly wage of $15 an hour for its employees by the end of June 2021, with hourly starting wages now ranging from $11 to $18.
Pharmacy chain CVS Health is pledging to raise its minimum pay to $15 an hour for all employees by July 2022. The company's minimum wage recently increased from $11 an hour to $13.
In August, Starbucks raised its starting barista wage to $12 per hour, with a pledge to increase the minimum wage for all starts to $15 an hour within three years.
Pay Raises Could Boost Inflation
As the economy has recovered from the COVID-19 crisis, employers have struggled to find workers amid an ongoing labor shortage. To attract employees, many employers have hiked pay.
But pay for low-wage workers continues to rise, it will probably contribute to boosting inflation even more, as companies hand customers the bill for their increased overhead.
Some consumer services have admitted to raising their prices in response to wage pressure. Chipotle, for example, raised its prices by about 3.5 percent to 4 percent in June after it increased employee hourly wages by about $2 to an average of $15.
Navigating the Minimum Wage Decision
Employers that raise their minimum wage often act to offset the increase in costs. For example, some companies reduce the amount of labor they need by investing in automation or having fewer people working on the sales floor during a given shift.
However, employers should also consider how increasing minimum pay can be financially beneficial. Take turnover. "It costs 1.5 to 2 times salary to replace an employee, even if that employee earned minimum wage," said Amy Mosher, chief people officer at HR technology firm iSolved in Charlotte, N.C. "The longer it takes to fill a position, the more expensive it becomes."
(All Things Work)
$15 Federal Worker Minimum Wage Rate Will Apply to New Federal Contracts
The U.S. Department of Labor issued a notice on Sept. 16 explaining new minimum wage rates for employees who perform work on or connected to federal contracts. The rate will increase to $11.25 an hour for existing contracts on Jan 1, 2022. Starting Jan. 30, 2022, the rate will be $15 for work performed on new, renewed and extended contracts.
Many businesses that regularly receive contracts from federal agencies, such as construction companies, already pay more than $15 an hour. But the minimum wage increase would more likely affect employees performing other services for agencies, such as cleaning and cooking at federal buildings or staffing call centers to support government initiatives.
(SHRM Online and Bloomberg Law)