U.S. Bancorp to hike minimum wage for second time this year

For the second time this year, U.S. Bancorp in Minneapolis is boosting its minimum wage.

In response to inflationary and competitive pressures, the parent company of U.S. Bank — which increased its minimum wage from $15 an hour to $18 an hour in June — will lift it even further in early November to $20 an hour for all U.S. and Canadian workers. U.S. Bancorp will also provide a 3% raise to roughly half of its total workforce — about 35,000 hourly and salaried employees, the company announced.

The decision to boost pay comes after talks with employees about how inflation and other market dynamics are affecting them, the company said. In July, the consumer price index, which measures the change in prices over a period of time, rose 8.5% compared with the prior July, after rising 9.1% on a year-over-year basis in June, the highest such increase in four decades.

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"We know that the current economic and inflationary environment is presenting challenges for many people, including our employees," Elcio Barcelos, U.S. Bank chief human resources officer, said in an Aug. 24 blog post announcing the minimum-wage and base pay increases.

Given the current dynamics of the labor market, "it's important that we retain and attract talented employees … and these changes will have meaningful impact for thousands of our team members who are vital to our success and our customers' success," Barcelos added.

U.S. Bancorp employees who receive the 3% raise will still be eligible for merit increases in the first quarter of 2023 as part of the annual compensation review process, the company noted. The company did not say how many employees will benefit from the minimum-wage hike.

U.S. Bancorp is the latest in a string of large and regional banks to raise minimum wages in the midst of rising prices and a persistently tight market for financial services workers. 

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Bank of America, whose minimum wage has been among the highest in the industry for several years, instituted a $22-per-hour minimum wage in July, three months ahead of the original schedule. The Charlotte, North Carolina, company has pledged to pay at least $25 an hour by 2025.

New York's JPMorgan Chase, the largest U.S. bank by assets, has been increasing its minimum wage to between $20 and $25 an hour, depending on employees' location, while Truist Financial in Charlotte plans to increase its bottom-line wage to $22 per hour in October.

Synchrony Financial in Stamford, Connecticut, is also making changes. The credit card lender is moving its minimum wage to $20 per hour, up from its previous floor of $15 per hour.

U.S. Bancorp, which is still waiting for regulatory approval to acquire MUFG Union Bank in San Francisco, said that its minimum-wage boost will also apply to the Union Bank employees who are expected to join U.S. Bancorp when the $8 billion cash-and-stock deal closes. U.S. Bancorp said it will retain all Union Bank front-line workers in branches in California, Washington and Oregon.

The timetable for the acquisition, which was originally expected to be finalized during the first half of this year, has since been pushed back to sometime during the second half of the year.