They must have been high-fiving themselves at JPMorgan Chase’s PR offices this morning.
Chase’s CEO, Jamie Dimon, was given prime space on the New York Times‘ op-ed page today (7/12/16) to declare that his bank was doing something about “wage stagnation” and “income inequality” by “giving thousands of employees a raise”:
Our minimum salary for American employees today is $10.15 an hour…almost $3 above the current national minimum wage. Over the next three years, we will raise the minimum pay for 18,000 employees to between $12 and $16.50 an hour for full-time, part-time and new employees, depending on geographic and market factors.
“A pay increase is the right thing to do,” declares Dimon.
How nice of the Times to give one of our corporate overlords a chance to let us know he’s doing the right thing!
Chase is the largest bank in the United States, and in 2015 it made $23.9 billion in after-tax income. You may have gotten the (intended) impression from Dimon’s op-ed that Chase has 18,000 employees; in fact, it has 241,000. That means for each one of its employees, the company is making $99,000 in profit. By comparison, the prospect of a $1.85-an-hour raise for 7 percent of them over three years is rather small potatoes.
Dimon himself made $27 million in compensation in 2015. Right now, the lowest-paid full-time Chase employee makes 0.08 percent as much as the CEO; for those who get the pay raise, after it goes through, it’ll be 0.09 percent—assuming that Dimon doesn’t get a pay raise of his own in the next three years. So not much of a blow against income inequality—a problem that is in large part driven by the financial industry’s soaring profits.
That these meager advances were seen as significant news that deserved trumpeting on the New York Times op-ed page is reason enough for the Chase PR team to break out the champagne. But the real reason this is such a win for them is that these wage increases are largely involuntary.
Consider: In New York City, where Chase is based and more than 10 percent of its employees work, the minimum wage will be not $12 but $15 in 2019, and the rest of the state will soon follow. California, the state with almost a fifth of Chase branches, will have a $12 minimum wage in 2019, increasing to $15 by 2022. Many other states have already increased their minimum wages or are considering following suit; if the federal minimum wage is not increased by 2019, that would be the longest interval without an increase since a national wage floor was introduced in 1938.
So the raises Dimon is bragging about doling out will be legally mandated—if not everywhere in the US, at least in large areas where Chase operates. And thus one of the prime beneficiaries of income inequality is allowed by the New York Times to pose as its adversary.