Dive Brief:
- It's been a week of good news for some workers, as both J.P. Morgan Chase and Starbucks Corp. have announced substantial pay raises for some workers, according to media reports.
- In J.P. Morgan's case, CEO Jamie Diamond relayed in a New York Times opinion piece on Tuesday that the mega-bank will raise its minimum wage for 18,000 American employees from $10.15 per hour to between $12 and $16.50 per hour by 2019.
- By year's end, Starbucks Corp. announced plans to raise employee pay by up to 15% later in 2016. For now, all workers in U.S. company-operated stores will get a base pay raise of at least 5% on Oct. 3. In addition, by Starbucks doubling the size of its annual stock award to employees (must be with the company for two years), the two compensation moves will add up to much as 15% for some workers.
Dive Insight:
In his Times' article, Dimon called the pay raise "the right thing to do," noting that long-term stagnant wages are hurting many Americans. The raise will affect all J.P. Morgan workers, including bank tellers and customer service representatives, Dimon wrote, allowing "more people to begin to share in the rewards of economic growth."
A J.P. Morgan spokesperson told Fortune that 90% of employees affected by this new policy are located in regions where the hourly minimum wage will increase to between $13.50 and $16.50. For example, New York City and San Francisco metro areas workers will see a base pay increase to $16.50/hour by 2019. Base wages for workers in other large cities, including Chicago, Seattle, Los Angeles and Washington, D.C., will rise to to $15 per hour by then.
According to Bloomberg, the Starbucks decision was driven in part by today's tightening labor market as well as new minimum wage laws being added in U.S. states and cities. Starbucks also needs to compete for new talent with restaurants and retailers who also have announced pay raises, especially large chains such as Wal-Mart Stores Inc., McDonald’s Corp. and Target Corp. Pay isn't the only way Starbucks has tried to give employees a lift, as the company also launched a paid tuition benefit for some workers via an online deal with Arizona State University.
It seems that the nationwide push for higher wages is starting to have a real impact, at least among large employers who need to keep their talent pipelines filled. One thing to note: Along with its pay raise, Starbucks also raised the price of some coffee drinks anywhere from a nickel to 20 cents. No official word on if the two are related, but the impact of employee-forward tactics on other parts of the business should be kept in mind.
