By Sarah Jaffe
We’ve talked a lot about the finance industry since it nearly destroyed the economy back in 2008. (By “we” here I mean the American public, though it’s just as true of progressive communities and the world at large.)
We’ve discussed pay for those who work at the top echelons of finance: Bonuses, salaries and stock compensation have all been up for debate. Anger tends to flare at the news of another round of bonuses at a bailed-out bank, or when, after a new misdeed is uncovered, we learn the perpetrators will keep their outsized salaries.
But we’ve talked very little about the wages and working conditions for the lower tier of bank workers: the tellers, customer service representatives, technicians and others who, as Bank of America teller Alex Shalom told me recently, often face the wrath of customers who’ve been hit with another $5 fee or heard about the latest rigging of rates or foreclosure fraud.
The New-York-based Committee for Better Banks is aiming to change all that. As I reported in November, the coalition of community and labor groups has set out to improve the finance industry by improving conditions for its frontline workers. The hope is that empowered tellers and customer service representatives, who live in the communities where they work and know the customers they regularly serve, will help create more community-friendly banks.
They’re now out with a report billed as the first on working conditions in banks since the 2008 financial crisis. Beginning in March of this year, organizers interviewed about 5,000 bank workers, most in New York City, and this fall they performed a more rigorous survey of 200 current and former workers to provide quantifiable data on industry trends.
They call it “A tale of two banking industries,” echoing the rhetoric often heard these days in New York after mayor-elect Bill de Blasio made “A tale of two cities” his campaign theme. Mid-level jobs in finance, they report, are being shifted out of New York to cheaper cities like St. Louis and Buffalo, where labor costs (and the cost of living) are much cheaper. Meanwhile, lower-end positions are being eliminated entirely in favor of new technology, or are being outsourced to places like India and the Philippines, or shifted to call centers in low-wage states like Florida.
According to a report from the New York State Comptroller’s office, there are 19,800 fewer people employed in the banking industry in New York now than before the financial crisis—and that’s at a moment when the industry’s profits are at an all-time high, totaling some $40 billion in the first quarter of 2013—an increase of 16 percent over that same period in 2012.
And let’s talk a bit about those executive salaries, shall we? The report notes that compensation packages of the top 50 financial CEOs went up by 26 percent in 2010 and another 20.4 percent in 2011. Not to mention that median CEO pay for the securities industry went up 22 percent in 2012. And that is, of course, even as firms’ stock price tanked—Bank of America’s stock price famously fell 58 percent in 2011, yet its CEO made over $8 million, and the next year, he got a 70 percent raise.
At the bottom end, workers feel squeezed. One-quarter of the workers surveyed reported that they had seen actual cuts to their take-home pay, perhaps the most shocking fact in the study, as most economic research shows that actual pay cuts—as opposed to the value of wages going down relative to inflation, or workers being replaced by people who are paid less—are very rare.
Additionally, the report cites a study from the University of California-Berkeley Center for Labor Research and Education, which found that bank teller salaries around the country are so low that about 31 percent of tellers and their families are receiving some form of public assistance, such as food stamps, Medicaid or Temporary Assistance for Needy Families (the program once called welfare). That costs state and federal governments nearly $900 million—another huge subsidy for already well-subsidized banks.
If all that’s not enough, workers also report sexual harassment and racial and sex discrimination in the workplace—and notes that major banks like Merrill Lynch and Bank of America have paid fines for discrimination cases.
The picture amounts, as Bank of America teller Shalom pointed out to me last month, to conditions very much like those of other low-wage workers. And despite finance’s rather unique role in the global economy, it seems that the big banks may be making some of their profits the same way Walmart and McDonald’s are—by squeezing them out of the people who make their companies run.
The survey really hits home when it allows the bank workers to speak for themselves. Tyler B. reports, “I was a confident and loyal employee. After being slammed daily for sales scores I started to have panic attacks and lost all pride in my work because it was never good enough.”
And Victoria C., a Wells Fargo customer service worker, says, “My manager was mentally abusive at Wells Fargo. At times he would not allow me to drink water. The higher ups send you over 50 emails a day pushing sales and your direct manager does most of the scowling directly. They don’t care about their customers and just want them to open more products. We don’t push sales for incentives at Wells Fargo. As an employee, we push sales just to be able to keep our job.”
The study recommends several improvements, including New York state legislation that would tighten rules on companies that get “job creation” subsidies, requiring they hit stricter goals for number and quality of jobs and have a “money-back guarantee” if those goals are not met. Significantly, the Committee also asks for stronger protections for whistleblowers and that banks be required to meet with the Committee for Better Banks to “develop a plan to raise industry standards and increase jobs in New York.” (One presumes that this is about as likely to happen as a spontaneous admission of guilt of financial fraud is likely to come from JPMorgan Chase CEO Jamie Dimon).
Bank workers might be the missing link between the institutions that employ them and the people who need financial services. Their complaints, presented in this survey, paint a picture of low-level employees who feel connected to their customers and want to make an industry that works for regular people, not a tiny group of overpaid executives. Presumably, this is just the beginning of the Committee for Better Banks’ plan for organizing among bank workers, but the basic strategy—seizing a moment when the public conversation has actually taken notice of pervasive low wages, and using that moment to bring attention to one of the less-scrutinized areas of big bank practices—is an interesting one that links workers to consumers rather than, as so often happens, pitting them against one another.
Sarah Jaffe is a staff writer at In These Times and the co-host of Dissent magazine’s Belabored podcast. Her writings on labor, social movements, gender, media, and student debt have been published in The Atlantic, The Nation, The American Prospect, AlterNet, and many other publications, and she is a regular commentator for radio and television. You can follow her on Twitter @sarahljaffe.