Cincinnati-based Fifth Third Bancorp will raise its minimum wage to $18, effective Oct. 28.
The company said the wage increase would apply to approximately 4,900 employees and it will primarily benefit retail branch employees and those in operations support functions, such as customer contact centers. Fifth Third previously raised its minimum wage to $15 from $12 in January 2018, citing tax reform under President Donald Trump's administration, and it also gave a $1,000 bonus to more than 13,500 employees.
Other banks that increased wages due to tax reform include Wells Fargo & Co., which hiked its minimum wage to $15, and Washington Federal Inc., which pledged to give employees with annual earnings of less than six figures a 5% raise. Some banks that also recently raised their minimum wage to $15 include Associated Bank NA, PNC Financial Services Group Inc. and WSFS Financial Corp.
Meanwhile, Bank of America Corp. raised its minimum wage to $17 on May 1, and it will increase the figure to $20 in 2021.
Congressional Democrats have questioned some American companies about their minimum wage policies in light of corporate profits, particularly after the passage of federal tax cuts. Sen. Bernie Sanders, I-Vt., has called for a $15 federal minimum wage and has criticized Walmart Inc. and the Walton family over the issue. The Democratic presidential hopeful presented a proposal to raise the retail behemoth's minimum wage to $15 from $11 at its annual shareholders' meeting.
Critics argue that a government-mandated minimum wage increase will make it harder for low-skilled and entry-level workers to find employment and will drive up expenses for companies, which could result in layoffs, especially at smaller community businesses.
The U.S. House of Representatives in July passed a bill that would raise the federal hourly minimum wage to $15. A report by the Congressional Budget Office estimated that a $15 minimum wage would boost the earnings of 17 million workers who fall below the wage threshold and would cut the number of people below the poverty threshold by 1.3 million in 2025. However, the CBO also said the policy would result in 1.3 million workers being laid off.