
Bank of America is raising its minimum wage for employees to $20 - iron0013
https://www.cnbc.com/2019/04/09/bank-of-america-is-raising-its-minimum-wage-for-employees-to-20-an-hour.html
======
rchaud
> The move is also a sign of increasing wage inflation for thriving companies.

This phrasing doesn't sit well with me. If the company is thriving, as it is,
then why would you term a wage increase as "inflation"? The wages aren't tied
to "shareholder value" or other metrics the BoD discusses before setting
executive compensation.

Also, the article should be retitled to "BoA raising minimum wage to $17", or
"plans to raise wages to $20 by 2021". Makes it sound like fait accompli
otherwise, which it certainly is not.

~~~
chrisseaton
> why would you term a wage increase as "inflation"?

Prices rising for the same product (the same labour) is 'inflation'. That's
just the definition of the word.

~~~
maerF0x0
How does increased productivity factor into that term? Seems it's not a like
for like comparison if productivity is increasing YoY.

~~~
mcherm
For employees who are paid by the piece (paid in proportion to how much they
produce) inflation with consist of paying more per piece.

But these employees are paid by the hour. Regardless of how productive they
are, they are getting paid to fix salary per hour of work. I think
productivity does not factor in at all.

------
mabbo
I'm sure there's going to be some legitimate criticisms (they don't have many
low paid workers; they're only doing this to win favor with the democrats; he
still makes too much money; etc) but I don't really care.

It's a good thing to do. They didn't have to do it. They did it. I'll judge
people on their actions first, intentions second.

~~~
Bartweiss
The concerns you list don't stop this from being a good thing, I agree. My
bigger concern is what BoAs rate of low-wage direct employees versus
contractors looks like, and _will_ look like in the future. The overall trend
seems to be that contracted service work is paid somewhat worse than direct,
but also faces no benefits, high firing rates, and far nastier working
conditions. I don't have numbers on BoA, and I doubt they'll publicize them.
But my concern is that moves like this (without a corresponding guarantee for
contractors) create an incentive to offload ever more work into conditions
that might be even worse than the current state of affairs.

I don't want to undersell this, though. I doubt bank tellers will become
contract labor anytime soon, and this will actually represent a significant
raise for them.

~~~
Ari_Ugwu
I wonder of 'trickle down economics' works when the money is injected more
closely to where it's supposed to trickle from?

While I don't think Bank of America has a large percentage of skill workers
compared to knowledge workers I think this sends a very forward thinking
message.

The debt waters are rising for both consumer and corporate and I assume we'll
see a correction soon that once again hits middle class and lower class folks
_almost_ ready to make a mobility play.

$20/hr during the coming lean times could be just enough to keep some folks
from losing too much ground.

I'm just guessing at the rationale but it does kind of make me want to switch
banks in support. Next few years could get rough for +60% of the US
population.

~~~
moate
>>I wonder of 'trickle down economics' works when the money is injected more
closely to where it's supposed to trickle from?

That's specifically not trickle-down economics. That's just a economics. If
you give more money to people, you're just giving more money to people.

The whole point of a trickle-down is that if you give large sums of money to
already rich and powerful individuals, typically in the form of tax breaks or
subsidies, then they will invest that money in sectors that create jobs which
allows the wealth to trickle-down to the people you're positing to help.

I'm not here trying to talk about the merits of either, just pointing out that
this is an entirely different style of economics.

~~~
Ari_Ugwu
I'm not sure I follow. A very big company that benefits from many subsidies
and government assurances used those profits gained to improve the lives of
it's workers. It very literally _trickled down_ from benefits given to the
top.

------
dsfyu404ed
Ctrl+F "contractor"

"0 Results"

This move is basically meaningless if it doesn't extend to the temp agencies
and businesses BoA buys labor from and contracts with to provide basic
services (custodial, POS systems support, etc.). Sure the gesture is nice but
it's hollow. Modern BigCos don't hire for low skill, low wage positions unless
it's part of their core business. They contract all that out, either they get
bodies from temp agencies or they get the entire service provided by a 3rd
party.

~~~
0xDEFC0DE
To pile on, they have been steadily employing less people due to technology:
[https://www.cnbc.com/2018/10/17/bank-of-america-ceo-brian-
mo...](https://www.cnbc.com/2018/10/17/bank-of-america-ceo-brian-moynihan-on-
cutting-100000-jobs.html)

~~~
veryworried
As they should. That is the point of technology.

~~~
0xDEFC0DE
Unless they are reducing employee counts in favor of hiring contractors, then
trying to score political points about a hot-button issue like minimum wage.

~~~
crumpets
Well then it's not because of technology is it?

~~~
0xDEFC0DE
Might be a bit of both TBH. It’s rarely that cut and dry.

The point here is calling out empty PR, but I’m not going to misrepresent an
article without proof. I just have suspicions.

------
dmitryminkovsky
It's hard to divorce this seemingly good news from the reality that this is
probably enabled by the fact the companies like BoA don't hire low-wage
workers anymore [0].

[0]: [https://www.nytimes.com/2017/09/03/upshot/to-understand-
risi...](https://www.nytimes.com/2017/09/03/upshot/to-understand-rising-
inequality-consider-the-janitors-at-two-top-companies-then-and-now.html)

~~~
CydeWeys
This is a good point and a good article. If Bank of America like many other
companies outsources a lot of its lower-paid positions, and these new
standards won't apply to the outsourced jobs, then a higher minimum wage that
mostly applies to people that were already being paid that much anyway won't
do too much.

I wonder if they're going to do something like my employer, and mandate
minimum wage and benefits for all of their contractors as well?
[https://www.forbes.com/sites/rakeenmabud/2019/04/09/googles-...](https://www.forbes.com/sites/rakeenmabud/2019/04/09/googles-
new-benefits-policy-and-the-role-of-worker-advocacy/)

------
nintendo95
To me as someone who is in no way expert on automation or an economist but
someone who knows how profit oriented big business is, especially banks, I
have a question: this looks to me like they expect so much automation
happening in the future that they can afford the move? Isn't that case with
McDonald's too, where they can have self-serving locations in near future, so
no problem with raising minimum hourly rates?

The ATMs nowadays do so much on their own. I was taken by surprise when last
time I had 5 of my checks scanned and deposited cash into my checkings by a
<big bank name here> ATM recently. No human interaction what-so-ever. So I can
withdraw money using ATM, I can add money using ATM, and I can cash/deposit
checks using ATM. Isn't that like 99% of what their 90% customers do? Isn't
that the case that in 5-10 years they will need one person on premises to
handle the remaining cases? So then that person can be making 20usd/hr, why
not? If they're replacing 4-5 other workers, this is savings anyway.

Of course this won't touch things like mortgages or auto-loans. For now that
is...

right?

~~~
ghaff
The only thing that's really new in the last 10 years (or more) though is
depositing through mobile apps. I've been doing that with ATMs for a very long
time.

I maybe go into a bank branch once every couple of years for some reason or
another. I'm always a bit floored by just how much prime retail real estate
bank branches consume in a typical city. I guess it's a form of advertising.
(Of course, the same thing is true of mobile phone stores.)

------
osullivj
I work for Bank of America Merrill Lynch (BAML) in London; I've been here 18
months as a contractor, and I'm switching to perm. Why? Because BAML is hands
down the most pleasant, civilized and supportive investment bank environment
I've encountered in 22 years in trading systems development with Chase
Manhattan, JP Morgan, Deutsche, CIBC and Barclays. Work life balance, and
"bring your whole self to work" are not just slogans here.

------
legitster
Of all the service sector jobs, bank tellers being underpaid is the most
ridiculous. If you are a bartender, I expect you to understand drinks. If you
are a musician, I expect you to listen to music. If you work in a bank, I hope
you have some financial stability!

~~~
lamarpye
Aren't bank teller wages determined by the market? I don't see how they are
underpaid if their salaries are market driven.

Edit: Strange. Getting some down votes. Is it because bank teller wages are
not market driven or is it pointing out that fact is discouraged on this site.

------
bmmayer1
This is nice, but it's important to realize this headline is not really about
minimum wage. The debate about minimum wage, of course, is about how wages
should be set by law, not about how much companies choose to pay their
employees.

~~~
ralusek
That debate is simple, though. They shouldn't be set by law, because it
removes jobs from the market and disproportionately punishes businesses that
rely on low-skill employment. Why is McDonalds morally responsible for
rectifying the problem of poverty, but SpaceX and Microsoft are relatively
unaffected? And we already know that minimum wage laws simply accelerate us
towards the threshold where employees priced out versus automated
alternatives. There are also entire industries that could become economically
unviable despite the fact that the employer and employee had previously agreed
to the terms of the employment arrangement.

UBI or infrastructure spending are much more sensible solutions to what is a
much broader problem.

~~~
C1sc0cat
The corollary is why should the state (ie tax payers) subsidize Baristas and
Fast food workers.

Nurses Doctors etc there is an obvious moral incentive.

~~~
scarface74
You mean like the state through pension funds invest in VC funds that
subsidize money losing companies who can then pay high salaries to white
collar workers?

If companies that can’t be profitable and pay a wage thst you think they
deserve shouldn’t exist is kind of a dangerous thing to say on a site
supported by a VC company....

~~~
C1sc0cat
Realy was thinking about the tax credits system in the UK ie benefits paid to
low paid workers.

And to be blunt if I was a LP / Shareholder in a fund/company ran by PG I
absolutely would expect hi to invest in companies that will be profitable and
not rely on government subvention to be profitable.

I am a small shareholder in PE investment companies both UK, USA and
elsewhere.

------
forkLding
This will also attract more people to want to work for BoA, right now their
average teller salary is $13/hr so this is probably an amazing improvement.

[https://www.glassdoor.ca/Salaries/new-york-city-teller-
salar...](https://www.glassdoor.ca/Salaries/new-york-city-teller-salary-
SRCH_IL.0,13_IM615_KO14,20.htm)

------
nkrisc
I'm curious what percentage of their workforce was below this rate to begin
with? I'm assuming the jobs that would be most affected by this are contracted
out and won't be affect after all.

~~~
bluedino
Bank tellers start out at about the same as some retail/fast food workers.

In the past, to make $20/hr you had to be a 'personal banker' where you had to
push products like checking accounts, loans, and retirement accounts on your
customers.

------
dwighttk
Good for their employees...

Also I quit using Bank of America years ago because they were more interested
in making money off of me via fees than providing any sort of service.

~~~
smrtinsert
What are you using now? I'd like to move off of them but have no exit
strategy.

~~~
dwighttk
I moved to ING which was absorbed by CapitalOne. I've had very few problems
with CapitalOne. There are no branches near me so I occasionally have to ask
friends to write me a check if I have some cash I need to deposit.

I half-heartedly looked for a credit union to join, but every one I found
seemed to be for groups of employees I'm not a member of.

------
ArtDev
Whenever I think about Bank of America, I remember this:
[https://abcnews.go.com/Business/bank-america-florida-
foreclo...](https://abcnews.go.com/Business/bank-america-florida-foreclosed-
angry-homeowner-bofa/story?id=13775638)

"On June 3, Nyerges, two sheriff's deputies and a moving truck showed up at
the local BofA branch. The deputies informed the manager that he could either
pay the Nyerges' legal fees— $2,500—or the movers would start taking away the
bank's furniture and cash"

Priceless justice!

------
couterSpell
This is great news.

Now let's just make sure they don't replace employees with lower-paid
contractors. I'm always suspicious when these minimum wage hikes don't talk
about contractors.

------
RickJWagner
Wow, $20 is good pay for a teller. Nice to be working for BofA with that going
on.

Second thought: Wages are rising, jobs are plentiful. But what happens when
the roaring economy changes? Will BofA stay the course?

------
tracker1
They've probably outsourced most of their cleaning and cafeteria services, so
not sure if that is inclusive. Otherwise it's not really surprising to see
salaries in that range.

------
crench
>by 2021

------
NoblePublius
Because unemployment is low and skilled labor is expensive. No other reason.

~~~
moate
I mean off the top of my head: More and more states are passing $15+ minimum
wage laws and they'll need to compete, because saying you pay people more
without context (like how many people will be laid off or converted to
contractors) can be good PR, because you realized you were already paying all
of these people approximately that rate so you can just streamline your hiring
negotiations and save money.

There's plenty of reasonable possibilities here.

~~~
NoblePublius
Pols increase the minimum wage after business signals it has to pay that wage
anyway. That way the pols can pretend they do something

------
ArtDev
Years ago, somehow they managed to deduct someones else's check from my
account.

I would never ever do business with Bank of America because of the criminal
home seizures during the great recession.

------
tyingq
I imagine there's a parallel plan to drastically reduce the total number of
their lowest pay tier workers. With contractors and more automation.

------
all2
This thread is plagued by a rather insidious idea that has bubbled up in
recent history: the idea of "human capital" in terms of the "greater good".

Sentiments like "people shouldn't be doing jobs that can be automated" or
"machines should do the work instead, we need _more useful_ jobs for those
people" stink of the ideas that 1) people must serve some societal purpose, 2)
that they are not fit to decide their own purpose, and 3) they are not fit to
determine what has value _to them_.

These values are actually now embedded in U.S.A. policies and major non-
profits, like "No Child Left Behind", and the Gates Foundation, or "School to
Work". (A tangent: we aren't enabling people to _learn_ and to _think_ , we
are teaching them to follow directions. Curiosity seems to be a waning
capability of many kids and we seem to be slipping towards a Soviet style of
teaching in public schools - which discourages self-generated thought and
questions.)

I'm not bringing this up because I'm a Luddite. I rather like the idea of
automating things, actually. I don't think our current, popular,
justifications are healthy.

Rather, on an interpersonal level, I think some of the justifications in this
thread are codependent, controlling, and uncaring.

~~~
Tyrek
Consider an alternative angle - Companies, as rational actors, will eliminate
automatable positions. Unless you're suggesting some sort of deliberate
intervention to save these jobs, they're gone.

The next question is how do we assist those displaced by automation. There are
multiple proposals including UBI and its ilk, but the most palatable
bipartisan idea is to find them new jobs.

The idea of finding 'better' jobs with more agency, etc. is not immensely new
- it draws from organization research on employee fulfillment and
productivity.

Overall, no one is saying that any specifically displaced individual needs to
take up <new job> in some sort of imagined totalitarian state - they're
perfectly free to choose a new job from the market. The only question is one
of skills and motivation.

~~~
tracker1
I'd suggest people learn how to do plumbing and electrical work. It's not work
that can be easily automated, and plumbers are often charging more than
lawyers.

The fact is, there is a _LOT_ of room for people to work and grow. The
_typical_ factory job is significantly waning, and will continue to do so.
Local service oriented jobs are far less likely to be outsourced at all.
"Dirty jobs" in particular tend to pay well, and are pretty damned safe from
outsourcing.

The bigger issues are more societal and likely to worsen with roughly 2/3 of
those in higher education being women, and over 70% of women unwilling to
date/marry those of a lower social/education status, even with matching
income.

The highest satisfactions in life, generally speaking, come from earned
work:income and family engagement.

~~~
MRD85
>The bigger issues are more societal and likely to worsen with roughly 2/3 of
those in higher education being women, and over 70% of women unwilling to
date/marry those of a lower social/education status, even with matching
income.

Depends on your perspective. As a single man with his life together in his
early 30's I'm finding life good. Is this societies problem or a problem for
these women?

~~~
tracker1
As society is dependent on a growing youth to support senior care, it depends
on your POV.

Because you specifically are doing well, doesn't mean society is. Directly,
the women in particular are not harmed, but statistically less happy. Changing
perspectives on a broader level would help a lot in any case.

~~~
MRD85
Growth cannot continue forever. At some stage we will need to stabilise or
reduce the population. I'm expecting that I'll be working until close to 70
and I think others should prepare for the same. If you're hoping for 35 years
of retirement then you should have a lot of money put aside.

As for women, this is their own choosing. If you want to "have fun" with the
most attractive men (looks, status, wealth) you can from 18 to 28 before you
look for a partner then you shouldn't be surprised when the men who will
settle down with you don't live up to the standards you're used to. There is
only so many of these men and they're happy to oblige fun but commitment isn't
so easy. There was a post yesterday showing how many young men are completely
missing out on sexual interaction.

------
halfjew222
The cynic in me says this:

Great press for BoA perfectly timed where automation will completely remove
the need for these low level jobs within 5-10 years.

~~~
Dirlewanger
Most likely. The only people keeping bank branches alive are boomers/older Gen
X.

