A recent study by the Economic Policy Institute highlighted another factor that’s driving wages up: More tipping at restaurants and bars, as customers return.
If that’s a large contributor to wage increases, then pressures should ease once restaurants reach full capacity, according to Josh Bivens, EPI’s director of research.
“So long as the industries that are seeing the really rapid wage growth are also the ones seeing really rapid employment growth, that actually doesn’t strike me as a shortage,” he said. “That strikes me as how economies adjust to a big increase in demand.”
Bloomberg
June 10, 2021
Elise Gould, senior economist at the Economic Policy Institute, said the data in conjunction with jobs numbers that have already been released for May “are telling a pretty similar story that there’s pick-up in demand and the supply of workers are increasing to meet that demand.
“It’s going to take a little while, but things are moving in the right direction.”
Financial Times
June 10, 2021
Average hourly wages across all industries last month increased by 2 percent, and leisure and hospitality was a leader for wage growth last month. But even the wage increases merely put the sector back to its pre-pandemic trend line rather than in inflation territory suggesting some massive labor shortage crisis, Heidi Shierholz, director of policy at the Economic Policy Institute, noted on Twitter.
“In leisure and hospitality, earnings have grown enough to suggest a sector-specific shortage, but that may be largely the result of customers — and their tips — returning,” Shierholz tweeted.
Skift
June 10, 2021
“Postal workers look like America, but with a higher proportion of Black workers and veterans,” writes Monique Morrissey, an economist with the Economic Policy Institute, in an enlightening report titled “The War Against the Postal Service” released this past December. It notes that postal work pays better than private sector jobs that do not require a college degree. Only 9 percent of postal workers make less than $15 an hour, compared to more than 28 percent in the private sector overall.
The Progressive
June 10, 2021
Instead, tips likely account for the pay increase as restaurants and bars return to pre-Covid customer capacity, according to Josh Bivens, research director at the Economic Policy Institute, a left-leaning think tank.
“Since December 2020, the rise in tip income, not an increase in base wages, can likely entirely explain the acceleration of wages for production and nonsupervisory workers in restaurants and bars,” he wrote Friday.
CNBC
June 10, 2021
“The labor market is on the right track, but there is still millions of workers yet to be absorbed in the economic recovery,” Economic Policy Institute’s senior economist Elise Gould wrote in a Tuesday blog post.
Al Jazeera
June 10, 2021
Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, noted the economy is still down 7.6 million jobs since early 2020 and said the real shortfall is more like 8.6 to 10.7 million when taking into account lost growth.
Courthouse News Service
June 10, 2021
“Weekly wages for typical workers in leisure and hospitality translate to annual earnings of $20,714, far (far) lower than in other sectors, even with the recent acceleration. Those increases are not going to create broad wage pressure,” tweeted Heidi Shierholz, policy director at the Economic Policy Institute, a liberal think tank. She added that measured wages included tips, which had fallen off substantially when dining was banned or limited.
“Recent wage growth in restaurants may not be largely from employers raising pay to attract workers, but from workers’ hourly tips—which plummeted during the downturn—normalizing as customers return,” she added.
The Hill
June 10, 2021
Economic Policy Institute (EPI) economist Elise Gould, one of our best analysts on employment data, sees the report as a “promising sign that the recovery is on track.” But she also notes that the “jobs shortfall” compared to pre-pandemic trends is “in the range of 8.6-10.7 million” additional jobs. If this trend keeps up, Gould says the unemployment rate could hit 4% “by mid-2022” with full recovery before that year ends.
Forbes
June 10, 2021
As white-collar workplaces debate the future of hybrid work with more than half of U.S. adults fully vaccinated, a new analysis provides a reminder that access to remote work during the pandemic has been a privilege for a lucky few, not the norm.
Just one in five U.S. workers are able to work remotely due to the pandemic, according to a report from the left-leaning Economic Policy Institute, which analyzed U.S. Bureau of Labor Statistics data from May 2020 to April of this year.
Of course, the ability to telework once COVID-19 hit was not created equally — and disparities, falling along demographic dimensions like education and race, have endured over the course of the pandemic.
About six in 10 workers with at least a bachelor’s degree were able to work remotely toward the start of the pandemic, compared to just 12% of workers with a high-school diploma or less. While the overall share of people teleworking declined over the ensuing months, a sizable gap between the two groups remains (34% versus 5%, respectively).
MarketWatch
June 4, 2021