A big hit for leisure and hospitality

By the end of September, a little more than 1 of every 4 leisure and hospitality jobs had disappeared – a huge improvement from the 60% drop in April. But with so many fewer jobs, earnings from bar, hotel and restaurant workers dropped by 9%, or $34 million. That’s more than four times the region’s 2% drop in total wages during the summer quarter last year.

Pay is a factor, too. Because leisure and hospitality jobs pay much less than the average Buffalo Niagara job, their impact on the drop in total earnings has been much less severe than the steep losses in employment.

Because the remaining leisure and hospitality workers often received extra pay raises to stay on the job and likely worked longer hours, their average weekly wage, which reflects the hourly wage and the hours worked, shot up by $140 during the summer to almost $600 – a 31% increase.

For some of those frontline workers, that bonus pay has since disappeared, even as more jobs have returned. By the end of March, the employment shortfall had narrowed to 1 of every 5 leisure and hospitality jobs, which means the wage gap also has narrowed, though we don’t have the data to say by how much.

Average wages are rising fast

Another odd thing has happened during this recession. Overall wages are plunging as jobs disappear, but workers who have kept their jobs have been taking home much bigger paychecks – partly because they’re working more, and partly because many got raises to reward them for staying on the job while lockdowns were in effect.