Business

JP Morgan to raise pay for 18,000 US staff

Jamie Dimon chief executive of JP Morgan Chase Image copyright Getty Images

Banking giant JP Morgan Chase plans to raise the hourly wages of 18,000 US staff over the next three years.

The bank's chief executive Jamie Dimon said he wanted to address income inequality and called on others in the private sector to do more.

"A pay increase is the right thing to do. Wages for many Americans have gone nowhere for too long," Mr Dimon wrote in The New York Times.

The increases will affect bank tellers and customer service representatives.

Salaries will increase from $10.15 (£7.71) per hour to between $12 and $16 an hour depending on geographic area.

Mr Dimon said the move "enables more people to begin to share in the rewards of economic growth."

He also said raising salaries was good for the bank because it would help attract and retain workers.

JP Morgan's shares were up 1.2% on Tuesday.

Income inequality

JP Morgan is not the first major US company to announces it would raise pay for hourly workers. On Monday, Starbucks announced it was raising wages for 150,000 hourly workers, and in April, McDonald's announced a pay increase for workers at its non-franchised stores.

Wage stagnation has been a problem in the post-recession recovery, despite the improving jobs market.

Federal Reserve Chair Janet Yellen has said it is a sign of that the labour market is not at its peak and that the central bank is watching wage growth closely.

The gap between the highest earners and lowest earners has also been a central theme in the US election.

In his opinion piece for The New York Times, Mr Dimon stressed the need for businesses to do more to help their workers. He said even companies that could not afford to raise wages could help by training workers and creating mentoring programs.

He also called on the government to expand the Earned Income Tax Credit (EITC) to more workers. The EITC is a tax refund for low-income workers with children.

"We face many challenges. But they can be overcome by government, business and the non-profit sectors working together to build on models of success that advance economic opportunity and create more widely shared prosperity," Mr Dimon wrote.

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