(CNN) — The American job market remains tight, and banks are scrambling to find people who want to work at their branches. That’s why Bank of America is raising its minimum wage to $20 an hour in 2020 — a year earlier than expected.
Bank of America said Monday it would raise its minimum wage for its more than 208,000 US employees by the end of the first quarter of 2020. It previously planned to boost paychecks to $20 an hour by 2021, and made a down payment on that commitment by hiking wages to $17 an hour on May 1, 2019.
But the bank is bumping up its timeline, saying it wants to share the company’s success with its employees.
Two years ago, the bank’s employees got a raise to a minimum of $15 an hour, according to a company press release. Higher pay for retail bankers is becoming crucial as the job market grows increasingly competitive. In October, the unemployment rate came in at 3.6%, remaining near a 50-year low. Wage growth has been solid as well.
“Employers are facing the lowest unemployment rate in 50 years and they’re feeling significant pressure to raise wages to compete for talent,” said Daniel Zhao, senior economist at Glassdoor.
Bank of America is not the first main street bank to boost minimum compensation for its employees. In June, Citigroup lifted its minimum wage in the United States to $15 an hour. JPMorgan Chase also announced its intention to raise wages to a minimum of $15 to $18 for 22,000 employees depending on the local cost of living, and committed to $18 an hour for employees in Washington, DC, in November.
As employers navigate these labor shortages, pay for lower-income workers is growing faster than the national average, Glassdoor data shows. In 2018, bank tellers saw a 10% pay bump on average on Glassdoor.
“These wage increases are happening despite fears of increased automation and the shift to online services in the banking industry,” Zhao said. “Bank tellers play a critical role in the customer relationship and these pay increases reflect the importance of a company’s frontline workers in today’s tight labor market.”
Many other retail companies, including Amazon, Walmart, Target and McDonald’s, have announced several recent wage hikes, as well as better benefits, for their rank-and-file workers.