Editorial: PNC Bank shows how market forces drive minimum-wage growth
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The changing wages of bottom-of-the-ladder jobs have been a talking point for months.
From fast-food restaurants and gas stations to grocery stores and amusement parks, the way front-line and entry-level jobs are compensated has been a big part of response to the changing needs of the economy since the beginning of the coronavirus pandemic.
In Pennsylvania, the minimum wage is set at the lowest number allowed by federal law — $7.25 per hour. Look around at the employers desperate for workers to keep the doors of area businesses open, and you won’t find many advertising that on their signs.
Instead, they are touting higher numbers, with some companies offering hourly pay north of the $12 per hour Gov. Tom Wolf has pitched as the new minimum. Sheetz bumped the number up to $15.50 for its starting convenience store workers over the summer. That’s more than the governor wanted to get to in steps over the course of years.
So it isn’t surprising to see that have an effect on other businesses.
This week, PNC Bank became the latest big-money institution to boost its minimum, with its lowest-paid workers moving to $18 per hour. That is a 20% increase for PNC employees and even more for the $11-per-hour BBVA USA workers, who came under the PNC umbrella with a 2020 acquisition.
It doesn’t just affect those entry-level employees. Higher-paid workers are also set to see a bump. About 60,000 people overall are impacted by the increase.
The Pittsburgh-based bank has grown steadily over the years and is now a national presence and plays in the same leagues as JPMorgan Chase and Bank of America. Those banks, which both have a presence in Southwestern Pennsylvania, also have increased their staff salaries. Both have moved to $20 per hour, with BOA having plans to get to $25 by 2025.
Just like the tug-of-war to hire fry cooks and cashiers, this is about demand. The workers are needed. It is also about competition. The companies are willing to pay.
“There was a lot of discussion in the past couple years about what entails a living wage, and it resonated with me. I thought ‘how can I offer a person a lifetime career if I cannot offer them a living wage?’,” PNC Financial Services Chairman and CEO Bill Demchak told the Associated Press.
It also says that market has driven the decision, and that it is unlikely to stop with PNC or bank tellers. The state’s minimum hourly wage might be $7.25, but it is going to be increasingly difficult for an employer to offer that and get someone to apply.