"These Bank Employees Get Paid So Little That They Need Public Assistance"
“Bank teller” may sound like a profession that would allow a person to pay all her bills and live a decently middle-class life, but that’s not the case. Three in ten bank tellers rely upon some type of anti-poverty public assistance program, such as Medicaid, the Earned Income Tax Credit, or food stamps, according to a new report from the Committee for Better Banks.
The report pulls from research by the University of California Berkeley’s Labor Center to illustrate the disparities within the banking industry between executives and retail-level worker bees. According to the report, “salaries for bank tellers nationwide are so low that 31% of bank tellers and their family members are enrolled in some type of public assistance program.” In New York City, where the cost of living is far higher than the national average, 39 percent of full-time tellers need public programs to get by.
Bank tellers’ reliance on public programs costs taxpayers $889 million annually. Given that the banking industry’s high profits — which have already returned to record levels just five years after the financial collapse — owe in part to its low labor costs for people like bank tellers, this means that taxpayers are effectively subsidizing bank profits to the tune of nearly $900 million per year.
This sort of indirect public subsidy of rapacious corporate profits is common in the fast food industry, but the banking business tends to present itself as a more sustainable and career-oriented industry. “These are jobs where communities are led to believe this is a career path to professional life, and they’re actually dead-end jobs,” one New York activist leader involved in producing the report told the Huffington Post.
Overall, businesses’ ability to pay unlivable wages that push people onto public assistance rolls costs taxpayers a quarter-trillion dollars every year. That public subsidy of poverty wages is most common in the fast food industry — where workers are once again striking on Thursday in as many as 100 cities around the country — but this week’s report on bank tellers shows it is an economy-wide problem.
If Congress raised the minimum wage companies would be less able to deprive working people of economic security. Gains in worker productivity should have raised the wage floor to almost $22 an hour, which is just about where the minimum wage would be today if it had grown at the same rate as the earnings of the top 1 percent over recent decades. And even a far more modest wage hike could restore the old American economic arrangement whereby working full-time meant a person didn’t have to live in poverty, as President Obama noted yesterday in a speech about the dangers of declining economic mobility.