Economy

Bank Raises Its Minimum Wage To $15, Sees Immediate Benefits

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In August, New York-based Amalgamated Bank announced it would immediately raise its minimum pay to at least $15 an hour.

At the time, the bank noted that it was the first to make such an announcement. But it’s also committed to making sure more follow its lead.

The bank, which is owned by the union OPEIU, came to the $15 wage floor in the midst of contract negotiations with the union. The contract also specifies automatic 3 percent increases each year, ensuring annual raises for its workforce. “It’s a bold move,” said CEO Keith Mestrich. “We need to be bold like that.”

But it’s one that’s paying off. “It’s been incredibly well received. I haven’t heard a single person in our bank that doesn’t think that’s the case,” he said. “Morale in our bank is just great after this.” He’s even heard from potential customers who say they have sought out the bank after the announcement.

But the bank isn’t satisfied to make its own changes. It also wants to change the industry. A recent report from the National Employment Law Project (NELP) found that bank tellers, the most common job in the financial services industry, make a median wage of just $12.44 an hour and three-quarters make below $15. That means that about a third of bank tellers rely on some kind of public, such as Medicaid, food stamps, or the Earned Income Tax Credit, to get by. Many who work in customer service, maintenance, protective service, and production also make below that wage.

“I think people are a little shocked that in the financial industry, where you’re used to hearing about the giant wages of the people at the top, people have a hard time believing that people even at lower levels in the bank could possibly make something as paltry as $12 an hour or less,” Mestrich said. “In most places that’s not really a living wage. That’s a problem.”

Amalgamated has launched a campaign to get a $15 minimum wage — a level that has already been passed in cities like Los Angeles, San Francisco, and Seattle — and encourage all other banks to adopt one in their own businesses. It also recently sent a letter to other banks urging them to adopt other practices that it calls “principles of responsible banking” such as ending the intense opposition to regulation, advocating for policies that would help customers, and embracing corporate transparency.

“I look at an industry that’s highly, highly profitable, whether giant banks or even banks as small as ours,” Mestrich noted. “The industry is highly profitable and making nice margins and has the ability to pay all workers a decent wage… There’s plenty of room to share with employees.” According to NELP, after paying for costs like compensation, overhead, and taxes, the 10 largest consumer banks still keep 20 cents of profit on every dollar made.

“This is one hundred percent a full commitment by the bank to be supportive of not just raising the wage at our bank, but supportive of policy change,” Mestrich said.