The cost of living has risen for leisure and hospitality workers while a hot labor market has spurred salary growth for low-paid workers – but this growth is starting to slow down.
Marielle Fabie-Hussey, like many restaurant workers, left her job during the pandemic due to lost hours, burnout, and exhaustion. But, after six months out of work, she is once again in the kitchen, enjoying higher wages and enhanced perks.
Workers in the leisure and hospitality industries, among them chefs like Fabie-Hussey, were particularly badly hit by the pandemic. Historically, they’ve also been among the lowest paid. But during the recovery from the pandemic recession, these workers emerged as surprising winners, receiving wage increases as a result of a tight labor market.
The leisure and hospitality industry saw a 17.7% hourly wage increase since 2021 – compared to 10% overall in all sectors. Since last year, the sector saw a 5.7% growth in wages. Still, average hourly earnings for all employees in the hospitality industry is at $21.01, compared to the median earnings across industries at $33.36.
Since the pandemic began, the hospitality industry has recovered swiftly and continued to hire quickly, even as overall job growth has slowed. Yet, employment remains below pre-pandemic levels. A scarcity of available workers has put pressure on businesses in the sector, who have responded by raising wages, offering bonuses, and providing flexible schedules to compete and keep workers.
Now, however, those gains may be in jeopardy as the Federal Reserve continues to gradually boost interest rates to regulate inflation and to cool the economy.
Low-wage workers tend to be the first to suffer when the economy cools as this slowdown is driven by various indicators like a decrease in consumer spending, which might push businesses in the sector to reduce their current workforce or further limit hiring.
For Fabbie-Husey, 33, the income boost and perks in her position as a sous chef in the San Francisco SalesForce headquarters have helped her get on her feet after unemployment. The position grants her, to name a few, life insurance, a monthly wellness allowance that a worker can claim for a total of $100 and be used for anything including massages or a gym membership, PTO and even option to purchase stock.
“I do feel that my hourly wages allow me to complete my monthly payments due to their added benefits. I'm also less burnt out and have a more consistent schedule,” said Fabbie-Hussey.
Still, even after recent wage gains, wages for some households are not adequate according to a report by the Economic Policy Institute.
“It's also important to remember to not lose the point that even though there have been great gains, these are still incredibly low paid jobs,” said Elise Gould, senior economist, and director of health policy research at the Economic Policy Institute, a liberal think tank.
Elsa Roldán, 61, has been working as a guest room attendant of the Bellagio Resort & Casino for over 15 years at the Strip in Paradise, Nevada. Her hourly wages are currently at $20.60 – 20 cents more than the average hourly earnings of hotel workers. She is a single mother of a 19-year-old autistic son, who she solely cares for.
According to the Bureau of Labor Statistics, hotel employment has grown from 1,054,900 jobs in May of 2020 to 1,860,700 jobs in April of 2023. Even though wages for hotel employees have grown since the pandemic, the national average hotel wages for March 2023 are more than $23 per hour.
Roldán, who is part of The Culinary Union, cites as a problem the lack of workers' interests to work at the hotel and the increasing demand of services. “People go, come in, and leave after two weeks.” Because of the sector's labor crisis, working more than five days a week has become the standard. She claims that working at her age is not ideal, but it is vital to maintain her kid, pay rent, and purchase goods, including food.
In 2022, 2.8% of employees nationwide in the leisure and hospitality industry were members of a union, while 3.4% were represented by one.
“That said, wage growth has been very uneven, even within particular cities,” said Ben Reynolds, organizer, and the secretary-treasurer of Restaurant Workers United, union run by and for restaurant, bar, and cafe workers in America according to their website.
“The fact that organization and unionization are so low right now in restaurants has a lot to do with that.”
As restaurants and hotels continue to meet consumer demand, finding the ideal employee remains difficult even when job openings decreased after an uptick at the end of last year. Restaurants, for example, cite rising food costs and staffing as their major challenges according to a recent survey from the National Restaurant Association.
In the state of Massachusetts, finding workers is still a struggle according to Jessica Muradian, director of government affairs of the Massachusetts Restaurant Association (MRA). But for Muradian as demand for workers remains strong, she says that restaurants will have to amplify their strategy and become career oriented.
Anthony Anton agrees. Anton, the president and CEO of the Washington Hospitality Association, said businesses that prioritized their employees, were able to stay afloat during the pandemic.
Anton added that as long as there's more jobs in Washington state than there are people, employers are going to have to “get competitive with salary, get competitive with benefits, get competitive with flexibility, which is a huge part of the younger generation's need.”