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BofA Raises Minimum Wage to $21, Wage Push Inflation Will Kill Small Businesses

Wage push inflation will make it hard for small businesses to compete.
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BoA Sets Minimum Wage at $21 With $25 by 2025

BofA Hike Minimum Wage to $21 and $25 by 2025

Reuters reports Bank of America Raises U.S. Minimum Hourly Wage to $21.

Bank of America Corp said on Wednesday it had raised its U.S. minimum hourly wage to $21, as it works to keep its promise of increasing the pay to $25 an hour by 2025.

The $25 figure is higher than at competitors, and the second-largest U.S. bank has also asked its vendors to set a minimum wage of $15 an hour.

Walmart Corp, Starbucks Corp, Inc and CVS Health have raised or are planning to hike wages.

The current minimum wage at the federal level is $7.25 per hour, enacted more than a decade ago.

Amazon Minimum Wage

A big aid in the push for $15 started  in October of 2018 when Amazon Ups Minimum Wage to $15 for All Employees Starting Nov 1

I commented, "Amazon unilaterally upped its minimum wage, even for part-time workers. Now it wants every company to do the same."

On May 13, 2021, I noted Amazon is Hiring 17,000 With $1,000 Signing Bonus at $17 an Hour

Battle for $15 Has Mostly Been Won

On May 19, 2021 I commented It Took Nearly 10 Years, But the Battle for $15 Has Mostly Been Won

One of my readers accurately commented "It took so long that it really isn't a raise."

Is Discussing Salaries With Co-Workers a Good Idea?

In case you missed it, please consider Is Discussing Salaries With Co-Workers a Good Idea?

If you want bigger raises, and can handle the information, I suggest it's a good idea.

Mish Anecdotes

In July and again last week I was Colorado on wildflower and Autumn photo shoots.

There were help wanted signs everywhere. The hotel we stayed at in July went to automated check in. 

You insert your driver's license and it spit out room keys. It's a good thing a person was there to handle things because the keyosk would not take my license. 

The problem? I booked under "Mike" but my driver's license said "Michael". Such kinks will be worked out.

On the Autumn trip, a restaurant we went to for breakfast sandwiches was closed because people did not show up for work. Lines were impossibly long at other for the same reason.

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On the July trip, we ordered a pizza and was told it would take 45 minutes. It took 2 hours. The manager apologized but said they just could not get the help they need.

Even locally, in St. George, population 95,000, there are often lines to get into restaurants even though you can see many open tables. 

There are not enough servers to wait on people so restaurants make you stand outside, rather than sit inside unattended. This happens more often than not. 

Anecdotes do not constitute data, but this has been going on so long now, I bet it is widespread.

Impact on Small Businesses

I suspect small family owned businesses are getting killed by spiraling wages hikes and supply chain disruptions.

Big outfits can last a long time by issuing debt. But a local pizza place offing $10.00 an hour cannot do the same thing, nor do smaller businesses have the purchasing power of a national chain.

What About Attitudes?

There is a huge attitude difference between Boomers and Zoomers. The former generally had a work ethic of do whatever it takes no matter how long it takes. In contrast, Generation Z does not want to work even 40 hours.

Those are generalizations, of course. Everyone does not neatly fit into the same slot. 

Yet, the generalizations coupled with lack of skills explain the severe work shortages we see. 

And who wants to work for $10 an hour if unemployment pays nearly as much if not more.

New Battle Cry

The new battle cry will soon be, assuming it's not already "$25 by 2025" .

Well good luck to small businesses.

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