343,000 Hospitality Jobs Were Added in June, but Workers Don't Seem to Want Them
The hospitality industry is desperate for workers. But here's what may be holding applicants back.
The coronavirus pandemic hit a lot of industries hard. But the hospitality industry, which includes hotels and restaurants, really bore the brunt of it.
Early on in the pandemic, many restaurants were forced to shutter for in-person dining and limit themselves to takeout and delivery only. And while hotels largely weren't forced to close, travel activity declined substantially during the pandemic, resulting in record-low occupancy rates in 2020.
But now, things seem to be improving on the hospitality front. With coronavirus restrictions being eased or completely lifted, restaurants can, by and large, welcome back diners at full capacity. And with quarantine mandates being a thing of the past, travel has become a lot more viable, and hotels are already seeing strong surges in bookings.
There's just one problem: The hospitality industry is in desperate need of workers. And if it doesn't find them, the industry's recovery could lag.
Why aren't more people applying for hospitality jobs?
In June, the U.S. economy added 850,000 new jobs, which was well over 100,000 more than economists were predicting. Leading the pack was the hospitality industry, which added 343,000 jobs after an uptick of 306,000 new jobs in May.
But while hospitality jobs may be available, applicants don't seem to be biting. The problem has gotten so bad that restaurants, for example, have resorted to offering hiring bonuses just to get workers in the door.
So what gives?
Well, for one thing, in 24 states, jobless workers are still entitled to a $300 weekly boost in unemployment benefits through the beginning of September. That $300 is on top of their regular state benefits. When we compare those benefits to what some hospitality workers may be earning or have the potential to earn (think minimum wage), it's easy to see why staying on unemployment might hold more appeal as long as that $300 boost remains in place.
Another issue could be access to health insurance. For many people, it's worth it to return to a job for the health insurance alone. But many restaurant workers aren't entitled to health benefits, and so they may be less motivated to apply for open positions.
Let's also remember that hospitality jobs can be among the most dangerous from a pandemic perspective. They involve interacting with people, many of whom may no longer be wearing masks now that that requirement no longer exists. And in the case of restaurant workers, the exposure to non-masked people is constant. That's a health risk many people may not want to take in exchange for minimal wages.
In a May 2021 report published by One Fair Wage and the UC Berkeley Food Labor Research Center, 53% of restaurant workers have considered leaving their jobs since the start of the pandemic. The reasons? Low wages and safety concerns, among others.
Restaurants and hotels contribute to the greater economy, so if the industry remains sluggish, it could impact our overall recovery. Also, closed-down restaurants and hotels are bad for local economies. When businesses close, home values can decline, leaving mortgage borrowers with less equity, as just one example.
Lawmakers have argued that boosted unemployment needs to end for industries like hospitality to recover. But if wages in that industry remain stagnant, hotels and restaurants may experience a dearth of applicants -- even once that $300 unemployment boost goes away completely in a couple of months.
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