RBFCU Raises Minimum Pay to $18, Reflecting Upward Trend Across Industry
Other credit unions are making similar moves as employee turnover pressures rise.
Randolph-Brooks Federal Credit Union announced Monday it has raised its starting pay to $18 per hour, joining the ranks of credit unions, banks and other businesses that have decided to increase their starting pay well above minimums required by law.
President/CEO Christopher O’Connor said the salary increase from $15 per hour to $18 is essential to acquiring the talented workforce necessary to carry out the credit union’s mission of improving its members’ economic well-being and quality of life.
“This increase to $18 per hour is one investment RBFCU is making that ultimately shows how we care about our members,” O’Connor said. “By increasing starting pay 20%, we are confident the response will be even better levels of service by employees who know they are being competitively compensated.”
Current employees will also receive a pay increase. Along with wages, the credit union’s benefits include paid time off and paid holidays, a 200% company match on “entry tier” contributions to a 401(k) program, and medical, vision and dental coverage from the first day of employment.
“RBFCU is committed to providing a positive work environment that puts our employees’ health and well-being first,” O’Connor said. “Happy employees make happy members.”
A news release from the credit union said its 20% increase puts its starting wage well above the $7.25 minimum wage rate for Texas and the nation, “during a time when businesses across the country have experienced challenges in hiring and retaining employees.”
Randolph-Brooks’ announcement came two weeks after the Pittsburgh-based PNC Bank announced that its current minimum pay rate of $15 would rise to $18 per hour starting Nov. 22.
PNC made a point of noting that the raise would include employees who became part of PNC in June when it completed its $11.6 billion purchase of the Houston-based BBVA USA, acquiring a major footprint in Texas and becoming the nation’s fifth-largest bank with $560 billion in assets.
Data from the U.S. Bureau of Labor Statistics showed average hourly earnings among all private-sector U.S. employees was $30.44 per hour in June.
The latest detailed data from BLS’ Occupational Employment Series showed average pay for all 12.1 million workers in Texas in May 2020 was $25.19 per hour, or $52,400 per year, compared with U.S. averages of $27.07 per hour, or $56,310 per year.
Among Texas’ 36,460 tellers, average pay was $14.90 per hour, or $30,980 per year. Among the 423,570 tellers nationwide, pay was $15.85 per hour, or $32,960 per year.
Credit unions that raised their minimum wage this year include EFCU Financial Federal Credit Union of Baton Rouge, La. ($687.5 million in assets, 53,556 members), which raised its minimum pay from $15 to $17 an hour in June, and Michigan Legacy Credit Union ($269.9 million in assets, 23,253 members). The credit union based in Wyandotte, Mich., 11 miles southwest of Detroit, raised its minimum wage from $13 to $16 per hour, with another raise to $18 after one year’s employment.
The Charlotte-based Bank of America raised its minimum last year to $20 per hour, and announced in May the floor would rise to $25 by 2025.
Gregory A. Mitchell, president/CEO of First Technology Federal Credit Union of San Jose, Calif., said pay tends to vary by region and job demands. The Silicon Valley credit union generally pays its financial service and contact center representatives about $20 per hour.
PenFed Credit Union, based just outside Washington, D.C., in Tysons, Va. ($27.7 billion in assets, 2.3 million members), pays its more than 3,000 employees at least $16 per hour.
PenFed President/CEO James Schenck wrote a guest column in the July 30 issue of Forbes magazine calling on CEOs to bypass congressional gridlock and raise their employees’ minimum wage to at least $15 per hour.
Schenck said potential job losses would be outweighed by the benefits of raising thousands of people out of poverty, increasing wages for a broad swath the American workforce and lowering turnover.
“Then there’s just the common-sense argument: When people are doing better in their personal lives — not worrying about how they’re going to pay for their groceries or buy school supplies for their children — they’re doing better at work,” he wrote. “Doing the right thing means putting people first, even if it doesn’t seem, at first, like the most profitable approach for the bottom line.”