money Expert: There's a 'great wage revolt' among restaurant workers
As the economy reopens and workers return to their jobs or find new ones, low-wage restaurant workers are coming back with more bargaining power, according to one expert.
“Down the income ladder, it does appear that there's a great wage revolt occurring amongst people who previously worked in food and beverage and perhaps some areas of leisure and hospitality,” chief economist at RSM, a consulting firm, recently told Yahoo Finance Live (video above). “I'm not quite sure they want to go back to work in those industries. And if they do, they're going to require more than $2.39 an hour plus tips.”
Already wages for new hires employed in low-wage service industry jobs rose 7.7% higher than expected in the first quarter, a recent paper by the Federal Reserve Bank of Atlanta found.
Wages for the average non-supervisory worker in the leisure and hospitality sector have also increased, reaching $15.87 an hour in May, up from $14.81 in January — the largest five-month gain on record, according to the latest data by the Labor Department.
“We have over 9 million jobs available and we only have one person looking for each job,” Brusuelas said. “That confers a slight shift from the dynamic towards bargaining power on the part of labor. It's been decades since that's been the case.”
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The number of job openings surged to a record high of 9.3 million in April, while new hires remained little changed at 6.1 million in April, according to the Labor Department’s latest JOLTS report. Job openings in accommodation and food services posted the largest monthly increase of 349,000, reaching 1.3 million in April.
Additionally, the number of unemployed workers per job opening fell to 1.1, a significant drop from its peak of 5 unemployed workers per job opening in April 2020.
At the same time, almost two-thirds of employers (64%) say they would pay more in the next six months to retain and attract talent, according to a survey of 404 middle market firms conducted by RSM. That’s up from 55% of employers who anticipated such an increase at the start of 2020 before the pandemic began.
“Employers have lost leverage,” Brusuelas said. “The balance of power has shifted to workers.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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