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JPMorgan Chase and Starbucks beef up minimum wage and benefits

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The income gap around the world is a glaring problem that most societies are failing to address. Finally, a tycoon has decided to respond to the issue, coming from an unlikely source – investment banking giant JPMorgan Chase’s CEO Jamie Dimon.

“Wage stagnation. Income inequality. A lack of quality education. Insufficient training and skills development. Issues like these have led approximately two-thirds of Americans to believe that the next generation will be worse off than the last,” Dimon stated in his op-ed piece in the The New York Times.

His words were well-supported by action – in the piece he pledged that over the next three years the bank will raise its U.S. minimum salary of US$10.15 an hour to between US$12 and US$16.50 an hour “depending on geographic and market factors.”

Base pay raises would be at least 18%, and 18,000 employees are expected to benefit from the proposed pay raise.

“A pay increase is the right thing to do. Wages for many Americans have gone nowhere for too long,” he wrote. He also expects the pay raise to help staff working as bank tellers and customer service representatives.

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In parallel, there might be one less reason to be upset with the surging price of your coffee from Starbucks – the coffee colossus is planning a pay raise for its front-line workforce.

Starbucks chairman and CEO Howard Schultz announced on Monday (July 11) in a memo to employees that starting October 3, employees and store managers will get a raise of at least 5%, with “geographic and market factors” determining any differences.

Stock awards will double for employees who have been with the company for more than two years.

The memo also announced starting July 18, interactive tools on its employee site will allow employees to personalise their health coverage, select an insurance carrier and choose a coverage level that fits their needs, as well as a competitive price that fits their budget.

“Whatever plan you choose, any savings go right back into your paychecks,” Schultz wrote.

Economists see the more generous packages as a sign the economy is moving ever closer to full employment. “It’s nice to try to lead the way. The labour market is tight and going to get tighter. Our biggest problem going forward is not going to be unemployment, it’s going to be a lack of labour,” Mark Zandi, chief economist at Moody’s Analytics told CNBC.

ALSO READ: J.P. Morgan, PwC skirt away from formal dress codes

Image: 123RF

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