In good news for workers in the hospitality industry, long considered amongst the lowest-paid sectors, their wages have risen significantly in recent years.
Over the last four years, salary rises have propelled hospitality workers’ wages up by almost 30 percent, a significant increase that defies long-standing income disparity patterns in the US. This gain, according to the U.S. Bureau of Labor Statistics, trumps the average 20 percent increase for the highest-earning categories, demonstrating a bit of a revolution in income inequality.
Nationally, a working paper from the National Bureau of Economic Research underlines that earnings for the bottom 10 percent of earners have grown more significantly than those for the top 10 percent since 2019. This favourable change has already reversed almost 40 percent of the income inequality that had grown since 1980. Wage dynamics are changing, and lower earners are seeing a considerable increase in earnings.
By way of comparison UK hospitality workers enjoyed pay rises that were about 50 percent higher than other sectors last year. UK hospitality staff received an average pay rise of 9.5 percent, compared to the national average of 6.6 percent, says The Drinks Business.
As you might expect, this transformation in wage disparity on both sides of the Pond, is linked to a tighter labor market, in which demand for labor exceeds supply, forcing companies to raise pay to attract staff. “Mostly what you’re seeing is the effect of a tighter labor market,” said Elise Gould, a senior economist at the Economic Policy Institute. “More competition, more scarcity of workers, means employers have to pay more regardless of what state you live in.”
“We’re experiencing a historic moment of worker power, where workers just aren’t willing to accept these wages anymore,” said Saru Jayaraman, who has advocated for higher wages for tipped hospitality workers.
The fact that lower-income workers ended up doing better on average than high earners was a surprise result of pandemic conditions, said Vincent Fusaro, who studies low-income households at Boston College’s School of Social Work.
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