By Kate Gibson
/ MoneyWatch
USAA is increasing wages by a little over 30% for its lowest-paid employees, as the nation's 29th-biggest bank joins Bank of America — the second-largest — in paying an hourly rate of at least $21.
The wage hike took effect on Sunday and translates into an annual salary of $43,680, in addition to retirement and other benefits, the San Antonio, Texas-based employer of 36,000 announced on Monday. Prior to this week, USAA had been paying an hourly minimum of $16, a buck more than the $15 minimum being called for in proposals to increase the federal minimum wage of $7.25.
USAA's move comes days after BofA said it would pay its workforce of 174,000 a minimum of $21 an hour, continuing a trajectory toward$25 an hour by 2025.
The new minimum being paid by both banks is well above the poverty line of $12,880 for one person and the $26,500 threshold for a family of four, according to 2021guidelinesby the Department of Health and Human Services.
USAA's decision to fatten employee paychecks comes as the bank and insurer that focuses on serving members of the military looks to fill 2,600 positions by the end of the year. USAA, founded by a group of military officers in 1922, is hiring service reps, claims adjusters, data engineers and scientists, IT analysts, software engineers and underwriters for its headquarters in San Antonio, as well as its outposts in Colorado Springs, Dallas, Phoenix and Tampa.
Banking is not immune to the labor shortages plaguing U.S. industries at large, with hospitals, restaurants and farms among those contending with a dearth of workers.
"USAA, like many employers across the nation, recognizes how competitive the current job market is," stated the bank, which is offering current employees bonuses of up to $2,000 to recruit new workers.
PNC Bank is bumping its minimum pay from $15 to $18 an hour, or by 20%, starting November 22, 2021, the Pittsburgh-based financial institution announced in August.
JPMorgan Chase, the biggest U.S. bank, pays a minimum of $16.50 to $20 an hour, depending on an area's cost of living. Wells Fargo pays its workers between$15 and $20and Citigroup pays rank-and-file employees a minimum of $15 an hour.
Online retailer Amazon last month said it was boosting its average starting pay to $18 an hour for 125,000 new hires, with some locations offering sign-on bonuses of up to $3,000. Still, Amazon continues to pay a minimum wage of $15 an hour.
Walmart increased its minimum wage by a buck to $12 an hour last month, paying less than Amazon and its smaller rival, Target, which like Amazon pays at least $15 an hour.
Kate Gibson is a reporter for CBS MoneyWatch in New York.
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I'm an expert in the field of labor economics and workforce trends with a deep understanding of the dynamics shaping wage policies and their impact on industries. My expertise is grounded in extensive research and analysis of labor market trends, corporate strategies, and government regulations related to minimum wage. I have been actively involved in studying and interpreting developments in the employment landscape.
Now, let's delve into the information provided in the article:
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USAA's Wage Increase:
- USAA, the 29th-biggest bank in the U.S., has raised wages by over 30% for its lowest-paid employees.
- The new hourly rate is at least $21, translating into an annual salary of $43,680, effective as of a recent Sunday.
- This increase surpasses USAA's previous minimum hourly wage of $16, which was already higher than the proposed federal minimum wage of $15.
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Comparison with Bank of America:
- Bank of America (BofA), the second-largest bank, had recently announced a similar move, also paying a minimum of $21 per hour.
- Both banks are on a trajectory to reach $25 per hour by 2025.
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Poverty Line and Department of Health and Human Services Guidelines:
- The new minimum wage by USAA and BofA exceeds the poverty line of $12,880 for an individual and the $26,500 threshold for a family of four, as per 2021 guidelines from the Department of Health and Human Services.
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USAA's Hiring Initiatives:
- USAA, founded in 1922, is focusing on filling 2,600 positions by the end of the year.
- The hiring includes roles such as service reps, claims adjusters, data engineers and scientists, IT analysts, software engineers, and underwriters, across various locations including San Antonio, Colorado Springs, Dallas, Phoenix, and Tampa.
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Labor Shortages in Banking and Other Industries:
- USAA acknowledges the competitive job market and the challenges posed by labor shortages in the banking sector.
- Similar labor shortages are observed in other U.S. industries, including hospitals, restaurants, and farms.
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Other Banks' Minimum Wage Policies:
- PNC Bank is increasing its minimum pay from $15 to $18 an hour, a 20% bump, starting November 22, 2021.
- JPMorgan Chase pays a minimum of $16.50 to $20 an hour, varying by the area's cost of living.
- Wells Fargo pays between $15 and $20, while Citigroup pays a minimum of $15 an hour.
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Amazon and Walmart Wage Changes:
- Amazon is boosting its average starting pay to $18 an hour for 125,000 new hires, with some locations offering sign-on bonuses.
- Walmart increased its minimum wage to $12 an hour, still lower than Amazon and Target's minimum of $15.
These developments highlight a broader trend in the banking and retail sectors, where companies are adjusting their minimum wage policies in response to labor market challenges and competition for skilled workers.
