JPMorgan CEO Jamie Dimon wants to make America great again.
The firm’s minimum wage for its 18,000 hourly employees will move from $10.15 an hour to a range of $12-$16.50 depending on market and location. It’s a move similar to that announced by Starbucks on Monday.
In his op-ed, Dimon writes that, “a pay increase is the right thing to do. 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 while this move covers a bit less than 10% of the firm’s 185,000 employees, it is a decision that speaks to all of the dominant economic themes of the moment.
Wages for low-skill workers are increasing as the labour market tightens. Top corporate executives are making louder and louder noise about a lack of investment across the US economy, be it a dearth of decent-paying jobs or a shortfall in needed infrastructure investment. And the resilience of the US economy amid what Ben Bernanke has called an “unusually uncertain” outlook continues to impress.
Against this backdrop, then, JPMorgan’s decision does not come as a particular surprise.
And when you consider Jamie Dimon’s generally bullish view of the US economy and the future of this country, a decision to invest in the company’s most economically vulnerable employees is Dimon more or less putting his money where his mouth has been.
The broader banking business, of course, is under assault with a recent report estimating a million jobs in the sector could disappear within a decade, while the number of bank branches has been on a steady decline over the last decade.
In his op-ed, Dimon touts the success of former bank tellers within the JPMorgan organisation, though it is a near-certainty that a number of those existing positions — including those for which this raise covers — will disappear in due course, because almost all the functions of a bank teller can now be executed at an ATM.
Dimon told CNBC in March that technology is “the best thing to ever happen to mankind,” arguing that the benefits we reap from technological progress far outweigh the obsoletion of certain jobs.
And as part of its wage increase, JPMorgan will invest over $300 million in “career-oriented education aligned to growing sectors,” certainly a nod towards this reality that the firm’s lowest-paid workers are also among its most vulnerable.
But a lack of clarity on what the future holds does not provide adequate cover for neglecting investment.
And while calling for more investment in our citizens, our roads, and our companies is an easy public proclamation — be it from Jamie Dimon or Larry Fink or Hillary Clinton — actually committing to these sorts of initiatives and projects is the obvious next step to take.
Business Insider’s editor-in-chief Henry Blodget has argued for a “better capitalism” that reorients the idea of what makes a business valuable away from raw profits and towards an organisation that benefits investors, surely, but also employees, customers and the public at large.
The recent announcements out of JPMorgan and Starbucks are surely not entirely overhauled visions of what makes companies successful, but then again major re-calibrations of how companies ought to operate are not going to happen overnight.
Both JPMorgan and Starbucks — among others including Walmart and Target — are reacting to economic forces at play in the US labour market which likely influence these wage announcements more than anything else.
But after years of a tepid post-crisis recovery, and action from lawmakers in Washington, D.C. that continually fails to aid economic growth, corporate America has finally — it seems — been at least partially convinced to do what it has loathed for decades: pay workers more.
This is an editorial. The opinions and conclusions expressed above are those of the author.