IntroductionAmidst the economic turmoil, BofA, now the largest bank in the nation, has continued to hike up bank fees and credit card interest rates on consumers, cut jobs, and pay workers poverty-level wages. While his own workers have been forced to turn to state-funded healthcare programs, Bank of America CEO Lewis has sought opportunities to grow his business and buy banks on his "wish list." Since the fall of 2007, BofA has acquired LaSalle Bank, Countrywide Financial, and Merrill Lynch. In naming him "Banker of the Year," American Banker noted, "Mr. Lewis has demonstrated an innate competency for taking advantage of others' circumstances." Laying Off Workers
As it expands, BofA has closed call centers, outsourced back-office jobs to India, and cut tens of thousands of jobs to turn record profits from its series of buyouts. Lewis says, "I feel bad about firing people, but at least I have the courage to do it." Since 2004, the bank has cut over 34,000 jobs, including:
- 12,500 jobs after the Fleet Bank merger in 2004
- 4,500 additional jobs after restructuring Fleet Bank
- 6,000 jobs after acquiring credit card issuer MBNA in 2006
- 4,000 jobs in Illinois and Michigan following the LaSalle Bank merger in 2007
- 7,500 jobs after the Countrywide merger in 2008
Now, after receiving a $25 billion taxpayer bailout to help restore the economy, BofA is planning another round of cuts. BofA recently announced plans to eliminate up to 35,000 jobs over the next three years in what would be one of the largest rounds of layoffs in the history of the financial services industry. These cuts will amount to 12% of the company's workforce following the Merrill Lynch acquisition.
At its branches, BofA has a record of paying low wages to its tellers. According to a salary survey by PayScale.com, the median salary of BofA bank tellers was $23,597 a year as of December 28, 2008. By comparison, Lewis took home $99.8 million in 2006, more than four thousand times as much as a BofA teller.
Not surprisingly, with such low wages, BofA employees and their families often have to turn to the state for taxpayer subsidized healthcare. Rhode Island and Massachusetts are among the select states that publicly disclose the names of the top employers whose workers use state-funded healthcare for themselves and their dependents. In both states, BofA makes the list. In fact, it ranked fifth amongst employers in Rhode Island whose employees were receiving state medical insurance assistance in 2006. By providing its workers with low wages and inadequate health coverage, BofA is able to keep down its payroll costs at taxpayers' expense.
"Bank of America tellers work hard for our customers and our bank. Tellers are not taken care of in return by the management of Bank of America - the top people got their holiday bonuses but are cutting our jobs and keeping our wages low. I know tellers who are working for less than $10 an hour. Tellers need a voice and to stand together." - Anonymous Bank of America Worker
Ken Lewis vs. Workers
"I feel bad about firing people, but at least I have the courage to do it." -Ken Lewis, Bank of America CEO
Ken Lewis 2006 compensation: $99,800,000
Median salary for a BofA teller: $23,597
Job cuts announced since 2004: 69,500