Wages Are Up, But Restaurant Workers Are Staying Home
Wages have been on an upward tear for five consecutive months, while the labor force participation rate stayed stagnant at 61.7%.
Wages are up across the US but weaknesses in the labor market continue to pervade the leisure and hospitality sectors, which added no jobs last month.
An analysis from S&P Global Market Intelligence shows that payrolls were flat in both sectors, as demand for those services waned in the wake of the delta variant’s surge and the workforce suffered from major shortages.
There were about 11.3 million jobs at U.S. restaurants and bars in August, according to S&P Global. That’s a year-over-year increase of 1.4 million, but is still down 41,500 jobs from July 2021.
Labor Department data from the bureau’s September 3 jobs report notes that average hourly earnings across all industries rose $30.73 last month, a historic high and a 4.3% increase year-over-year. Wages have been on an upward tear for five consecutive months, while the labor force participation rate stayed stagnant at 61.7%.
Average hourly earnings rose to $30.73 in August, an all-time high and a 4.3% jump in the last 12 months, according to the Labor Department’s Sept. 3 jobs report. Wages have now risen for five straight months. Meanwhile, the labor force participation rate, or the proportion of people who are either working or looking for work, was 61.7% in August, roughly where it has been since April. The participation rate fell as low as 60.2% in April 2020 and previously had not fallen below 62.7% since at least 2011.
Economists have pinned the decline in labor market participation on a number of factors, including health concerns amid the pandemic, lack of childcare options and expanded unemployment benefits. While some workers may get back on the job as their extra benefits run out, health and childcare concerns could continue to keep people away from work and pressure employers to offer higher pay and other incentives, economists say.
Experts told S&P Global that upward pressure on wages is the result of pent-up demand and slow-to-recover labor force participation. The latter may continue to stagnate as the delta variant continues to keep workers at home, some analysts say.
August saw the lowest number of jobs added in a month since January, with growth pegged at 235,000 positions. Total employment is more than 5 million jobs below pre-COVID levels.