By Jonnelle Marte and Ann Saphir
(Reuters) - Hotels, restaurants and other businesses are boosting pay as they try to rebuild their staffs and meet increasing demand from Americans ready to venture out as pandemic-related restrictions are lifted and more people are vaccinated.
But it is unclear if the increases will be sufficient to entice enough workers back to close the employment gap remaining in the sector hit hardest by COVID-19 job losses.
Average hourly earnings for workers in leisure and hospitality rose to $18.09 in May, the highest ever and up 5% from January alone, according to Labor Department data released on Friday. Pay rose even faster for workers in non-manager roles, who saw earnings rise by 7.2% from January, far outpacing any other sector.
Graphic: Pay surges for workers in leisure and hospitality - https://graphics.reuters.com/USA-ECONOMY/WAGES/yzdvxmxgjpx/chart.png
That higher pay could be a sign that companies are lifting wages as they seek to draw people back to work after more than a year at home. Some businesses are struggling to keep up with higher demand as more consumers, now fully vaccinated, get back to flying, staying in hotels and dining indoors. Job gains in leisure and hospitality this year have so far outpaced gains in other sectors.
But it is too soon to know whether the boost will be enough to help 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.
"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."
Graphic: Where wages are growing fastest - https://graphics.reuters.com/USA-ECONOMY/WAGES/gjnvwmabnvw/chart.png
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% 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.
STILL IN A HOLE
Employment in leisure and hospitality is still in a deep hole when compared with pre-pandemic levels.
The 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% from pre-pandemic levels, more than any other industry.
Graphic: Jobs by industry - https://graphics.reuters.com/USA-FED/INDUSTRY/jznpnrzdxpl/chart.png