Desperate for American workers, restaurants and stores to raise wages | national
WASHINGTON (AP) – U.S. restaurants and stores are rapidly increasing wages in an urgent effort to attract more applicants and cope with a flood of customers as the pandemic abates.
McDonald’s, Sheetz, and Chipotle are just a few of the latest companies to follow Amazon, Walmart, and Costco to raise wages, in some cases to $ 15 an hour or more.
Salary gains are, of course, a boon for these employees. Restaurants, bars, hotels and stores remain the lowest-paying industries, and many of their workers have been at risk of contracting COVID-19 on the job over the past year, while white collar workers could work from home.
Still, wage increases could contribute to higher inflation if companies increase prices to cover additional labor costs. However, some companies might absorb the costs or invest in automation over time to offset rising wages.
States and cities relax trade restrictions as deaths and COVID-19 cases drop, and in places like Florida, Nevada and Texas, restaurant traffic is above or near pre-pandemic levels, according to OpenTable , an industry software vendor.
Many companies say they have difficulty finding workers.
“Customers are coming back faster than restaurants can recruit staff,” said Josh Bivens, research director at the Left Institute for Economic Policy. “By raising wages, they can attract more workers.”
In April, even as overall hiring slowed, a category that includes restaurants, hotels and entertainment venues hired more new workers than the month before, a sign that extra pay is working.
McDonald’s announced Thursday that it will increase the wages of workers at its 650 company-owned stores to an average of $ 15 an hour by 2024. Entry-level employees will earn $ 11 an hour. The company is urging its 14,000 franchised restaurants to make the same changes.
Also on Thursday, Amazon said it would pay new hires $ 17 an hour, as it seeks to add 75,000 new workers. The online giant said it was offering a $ 100 bonus for new hires who have been vaccinated.
And Sheetz, a mid-Atlantic convenience store chain, said Monday it was giving its 18,000 employees a raise of $ 2 an hour and an additional $ 1 an hour for the summer.
Across the restaurant industry as a whole, wage gains have largely brought overall wages back to the same growth trend as before the pandemic, Bivens said. He expects increases to exceed this trend in the coming months.
Consumer prices rose 0.3% at restaurants in April, well below their labor costs that month. This suggests that many restaurants are accepting smaller profits rather than passing the costs on to customers, Bivens said. Restaurant prices have risen 3.8% in the past year, which is above pre-pandemic levels.
Concerns about higher inflation dominated financial markets after consumer prices jumped 4.2% in April from a year earlier, the largest increase in 13 years. But the rise is largely due to soaring used car prices and more expensive airline tickets, not higher labor costs.
A sign that businesses in general are struggling to recruit workers, the number of available jobs in the United States rose to 8.2 million by the end of March. Yet employers created just 266,000 jobs in April, far fewer than the month before.
Some of the unemployed are reluctant to return to work for fear of contracting COVID-19, while many women have left the workforce to care for children who are still in school online. Because of the additional $ 300 in unemployment assistance, some of the unemployed are receiving more benefits than they earned in their old jobs.
Gad Levanon, labor economist at The Conference Board, a research group on business, said labor shortages will likely be temporary, suggesting wages will not necessarily continue to rise at the same rate.
“The fear of COVID is likely to decrease, schools are likely to open in September, additional unemployment benefits will end in September,” he said. “So we will see some alleviation of labor shortages.”
Even with the recent pay increases, weekly earnings averaged just $ 477.40 in April in a category that included restaurants, bars, hotels, theme parks and other entertainment venues.
This in part reflects the many part-time workers in the industry, some of whom prefer shorter hours. But others would probably work more if they could.
Fight for $ 15 and a union, a group of workers trying to unionize fast food workers, has said the increases are not enough and will continue to demand a starting wage of $ 15 an hour for all McDonald’s workers.
“Clearly, McDonald’s understands that in order to hire and retain talented workers, something has to change,” McDonald’s employee and union organizer Doneshia Babbitt said in a statement. “Now they are raising the wages of some of us and using sophisticated math tricks to ignore the fact that they are selling most of us short.”
The fight for $ 15 calls for strikes in 15 cities next Wednesday ahead of the fast food giant’s annual shareholders meeting.