By Elizabeth Dilts Marshall

NEW YORK, (Reuters) – The tight labor market, inflationary pressures and pandemic risk will force big U.S. banks to increase wages in order to retain and attract workers.

The nation’s six biggest banks – JPMorgan Chase & Co (NYSE:), Bank of America (NYSE:), Citigroup (NYSE:), Wells Fargo (NYSE:) & Co, Morgan Stanley (NYSE: Goldman Sachs Group Inc (NYSE: ) has taken measures to increase the wages of some employees in 2021, and to make several expense projections that will be higher for next year.

After reporting on the fourth quarter earnings, Emily Portney (NYSE:) Corp spoke to Reuters about wage inflation.

Portney claimed that even the lowest pay levels are seeing wages rise.

This has led to increased competition among investment banks such as JPMorgan Chase, Bank of New York Mellon, and Goldman Sachs. They have been forced to charge more for talent to be hired and retained in the most lucrative positions.

Goldman Tuesday announced a 23 percent increase in fourth-quarter operating costs, due mainly to the higher benefits and compensation costs. Goldman, following rival banks’ lead in increasing second-year analyst and associate salaries to $125,000 and $150,000 respectively in August.

David Solomon, Goldman Chief Executive said that there is “real wage inflation in every economy.”

In the latest Labor Department Employment Report, wage increases were solid across all sectors.

Retail banks have been forced by the continuing pandemic risk to frontline workers at retail branches and the large number of job openings to increase the minimum wage offered to employees.

Bank of America reported its earnings Wednesday. It increased its minimum wages to $21 an hr in October. This was part of its commitment to maintain its minimum wage of $25 by 2025.

Late last year, Wells Fargo increased its hourly wage to $18-22 depending on where it is located. At the moment, $7.25 is the federal minimum wage.

Mark Doctoroff, cohead of MUFG’s Global Financial Institutions Group said that the banking industry is not exempt from labor shortages. He also pointed out the trend toward fewer people moving into the sector due to its relative attraction with… other industries.

Mike Santomassimo, Wells’ chief financial officer, stated last week that the bank anticipates an additional $500 million in wages and benefits costs for 2022. This is in addition to the usual level of merit increases and salary increases.

JPMorgan Chase is the U.S.’s largest bank. It reported that its non-interest expenses increased 11% last quarter, in large part due to the higher salaries of staff.

Citi also spoke out about the need for skilled workers last week in earnings.

Mark Mason, Citigroup’s Chief Financial Officer, stated that “hiring has been very competitive across all the business.”