Bank of America just announced that it will increase its company-wide minimum wage in October to $24 an hour, one of the highest wage floors in the United States. This $1 increase from the company’s current wage floor is more than good news for BofA’s employees – it’s an extension of one of the longest streaks of wage growth at any major business in America, and further evidence that doing well and doing good can and should coexist in corporate America. 

Bank of America’s leadership has made a multi-year commitment to paying their employees well a centerpiece of their business strategy. Since 2017, BofA has led its peers in raising wages for its employees, outpacing most other banks and businesses in almost every other industry. In the last seven years, it has increased its starting wage by over $9 an hour, raising the salary for its full-time entry-level workers by more than $20,000 a year, with plans for even more raises in 2025.

This isn’t an altruistic handout – it’s a calculated business investment decision by CEO Brian Moynihan, one of the savviest corporate executives on Wall Street with a great team behind him. 

“Paying a competitive wage and offering great benefits attracts the best people, and when you have the best people, you can do your best work,” BofA Chief Human Resources Officer Sheri Bronstein said to Fox Business earlier this week, making the case that investing in higher wages leads to better business outcomes. It’s a strategy that many rival banks have already picked up on (including JPMorgan Chase, where CEO Jamie Dimon has been an outspoken advocate for raising the minimum wage), and one that leaders in other industries should take notice of as well.

As a former CEO and businessman who has run multi-billion dollar companies, my career is proof that Brian and Sheri are right, and that Bank of America’s strategy is an effective one. Years ago, as CEO of CareCentrix, a health care company with hundreds of employees around the country, I was faced with a challenge. The company was struggling, and investors were demanding I cut costs and lay off workers. But instead of following their advice, I decided to invest in our employees. 

I froze executive pay increases and used that money to more than double our minimum wage, increasing it from $7.25 to $15 an hour. It was a risk, but it ended up being the best financial decision I’ve ever made – that investment in our workers directly translated to significant business success. In the next several years, CareCentrix more than tripled in size and quadrupled in value before it was bought by Walgreens, in large part because of the excellent work done by employees who were able to perform better because they felt secure and motivated.

This came as a shock to many, but it shouldn’t have. A company’s employees are almost always its greatest asset. Their expertise and productivity are the foundation upon which success is built. When you treat your employees better, more often than not, your business does better. A 2019 London School of Economics paper found that higher employee satisfaction, which is largely influenced by compensation, is directly tied to lower turnover rates, higher productivity, higher customer satisfaction, and critically, overall business profitability. Likewise, the stock values of companies that are consistently listed on Fortune’s 100 Best Companies to Work For list have significantly outperformed their peers over the last twenty years. 

Too many executives ignore this data and think of low-wage workers as disposable cogs in their businesses, easily replaceable and not worth investing in. But they’re selling their workers, their businesses, and their investors short with that mindset. Paying high enough wages to attract and keep the best people might not be a quick and easy way to inflate your quarterly profits, but it’s one of the most effective ways to ensure consistent excellence at all levels of a business. It worked for me and CareCentrix, it’s working for Bank of America, and it’ll work for other businesses as well, as long as executives are smart enough to give it a shot.