Mon, 20 Sep 2021

NEW YORK, New York: Hotels, restaurants and other businesses are boosting salaries as they try to rebuild their staffs and cope with the increasing demand from vaccinated Americans ready to step out.

However, it is unclear whether the larger salaries will speed up hiring, at a time when many workers are still facing other obstacles, including health concerns and having to care for children and other relatives.

Average hourly earnings for workers in leisure and hospitality rose to $18.09 in May, the highest ever, and up 5 percent from January alone, according to Labor Department data released on Friday. The pay rose even faster for workers in non-manager roles, who saw earnings rise by 7.2 percent from January, far outpacing any other sector.

"The fact of the matter is, the pandemic is still going on," said Daniel Zhao, a senior economist for Glassdoor. "The economy is running ahead of where we are, from a public health situation."

Some 2.5 million people said they were prevented from looking for work in May because of the pandemic, according to the Labor Department. And just about 40 percent of Americans are now fully vaccinated, meaning that many workers may still be concerned about the health risks they might face on the job, Zhao said.

The leisure and hospitality industry added 292,000 jobs in May, with about two-thirds of that hiring happening in restaurants and bars. But overall employment is still down 2.5 million jobs, or 15 percent from pre-pandemic levels, which is larger than any other industry.

If job gains continue at the same level as in May, it would take more than eight months to replace the jobs lost. And it is unclear if all of the jobs will be recovered, especially if business travel remains depressed or if other habits change after the pandemic.

Further, some people who previously worked at hotels or restaurants moved on to other types of jobs during the pandemic, such as packaging goods at warehouses, and it is too soon to know whether they will switch back as more of the economy reopens, said Zhao.

Some businesses struggling to find workers say generous unemployment benefits are preventing workers from joining the workforce. Others say the benefits may be helping them pay their bills while they wait for schools to reopen, receive vaccinations and resolve other obstacles that made it difficult for them to work during the pandemic.

Either way, any friction caused by unemployment benefits may be resolved over the next several months as those benefits are set to be reduced.

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