Banks' Rising Labor Costs Partly Reflect Industry-Specific Factors

Abstract

Supply and demand imbalances have been a key feature of the economy since the sharp rebound in economic activity that began in mid-2020. At the same time, compensation for workers has grown at a faster rate than its pre-pandemic trend, as companies raise wages amid labor shortages and a record number of job openings. Banks are facing the same labor market pressures pushing compensation higher across other industries, affecting profitability.

Author:

Laurel Hammond