NEW YORK–The CEO of JPMorganChase is providing the thinking behind the bank’s move to give thousands of its employees a raise.
In an op-ed in The New York Times, CEO Jamie Dimon wrote that the bank is concerned that wage stagnation, income inequality, a lack of quality education and insufficient training and skills development “have led approximately two-thirds of Americans to believe that the next generation will be worse off than the last. And it is true that too many people are not getting a fair opportunity to get ahead. We must find ways to help them move up the economic ladder, and everyone — business, government and nonprofits — needs to play a role.”
JPMorgan Chase said it has raised its minimum salary for its American employees to $10.15 an hour, plus “meaningful benefits,” and over the next three years will raise the minimum pay for 18,000 employees to between $12 and $16.50 an hour for full-time, part-time and new employees, depending on geographic and market factors.
“A pay increase is the right thing to do,” Dimon wrote in The New York Times op-ed. “Wages for many Americans have gone nowhere for too long. Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth.
And it’s good for our company, helping us attract and retain talented people in a competitive environment. While businesses, including ours, are understandably cautious when it comes to expenses, there are good expenses (investments that will pay off in the long-run) and bad expenses (waste and inefficiencies). We have never hesitated to invest aggressively if we thought it would improve our long-term prospects.”
Dimon said that while wages are important, so are the benefits offered employees. He said the company’s lower-compensated employees receive a medical plan that is subsidized up to 90% by the company, as well as dental, vision and other coverage. “Many of these and other benefits, including a 401k, pension, a special annual award, paid family leave, paid vacation and bereavement, have been increased in recent years,” Dimon said. “In total, the annualized value of all of our benefits for these employees is on average approximately $11,000 a year above their existing wages.”
Dimon said he recognizes that not every company can do the same, but every business should “do its part” in whatever way it can to address income inequality and more.