Banking

Bank of America is raising its minimum wage for workers sooner than expected

Bank of America will raise its minimum wage from $17 to $20 an hour early next year, more than a year sooner than previously announced.

The Charlotte-based bank said Monday the new minimum wage, first announced this spring, will now go into effect by the end of the first quarter in 2020. It was scheduled to increase to $20 by 2021.

The bank, which has about 16,000 workers in Charlotte, said the decision to move up the timeline for the increase is part of its commitment to be a great place to work through offering “leading” benefits, including pay.

In May, the company raised the minimum wage to $17 an hour.

The wage for the bank’s lowest paid workers has increased by more than $8 an hour since 2010, Bank of America said in a release. The move impacts thousands of the bank’s 208,000 employees.

CEO Brian Moynihan previously told CNBC that the increase to $20 would mean that employees starting with the bank would earn a minimum of $41,000 a year.

The announcement comes a week after the financial institution said it would give a one-time bonus to 95% of its employees. It’s the third year in a row the bank has given the bonuses, either in the form of cash or restricted stock units.

Employers nationally have been under pressure to raise compensation for the lowest-paid workers as the cost of housing and other expenses have outpaced wage increases.

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Allan Freyer, director of workers’ rights at the North Carolina Justice Center, praised the bank’s move, but said the government also needs to step in and mandate higher minimum pay.

In North Carolina, the minimum wage is $7.25 per hour, the same as the federal minimum wage.

According to the MIT Living Wage Calculator, a single person in Mecklenburg County would need to earn $12.58 an hour to make ends meet, and an adult with one child would need to make $24.69.

“If we waited for the market to consistently raise wages for everyone, we’d be waiting for a very long time,” Freyer said.

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Danielle Chemtob covers economic growth and development for the Observer. She’s a 2018 graduate of the journalism school at UNC-Chapel Hill and a California transplant.
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