Dive Brief:

• Bank of America will increase its minimum hourly wage to $25 by 2025, the Charlotte, North Carolina-based bank announced Tuesday.

• The move follows the bank’s 2019 decision to bump up by a year the timeline by which it raised its minimum wage to $20 per hour. The bank boosted its minimum hourly wage from $15 to $17 in May 2019 and announced it planned to further raise it to $20 by 2021. The $20 rate instead went into effect by the first quarter of 2020.

• The move by the nation’s second-largest bank comes as calls are growing for corporations to boost their minimum wages amid the pandemic. President Joe Biden has voiced support for a $15 federal minimum wage and recently signed an executive order raising federal contract workers’ minimum wage to $15 an hour.

Dive Insight:

Bank of America CEO Brian Moynihan said the increase will cost the bank "a few hundred million dollars a year” but called the move "an investment." 

Moynihan told CNN it's about maintaining a "great standard of living for our teammates.”

"The key is for big companies like ours to set a standard," Moynihan said. "We think it's part of sharing our success with our communities."

Bank of the America said this move will mean its minimum hourly wage will have increased by more than 121% since 2010.

"A core tenet of responsible growth is our commitment to being a great place to work, which means investing in the people who serve our clients," Sheri Bronstein, Bank of America’s chief human resources officer, said in a statement. "That includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent."

Bank of America also announced it is requiring all of its U.S. vendors to pay a minimum of $15 per hour to their employees dedicated to the bank.

The policy will affect Bank of America’s more than 2,000 U.S. vendor firms and 43,000 vendor employees, 99% of whom are already at or above the $15 per hour rate, the bank said.