from in pr Yesterday, experts at the University of Wisconsin-Madison:
Timothy Smeeding, professor of public affairs and economics at the University of Wisconsin-Madison, told Wisconsin Public Radio’s “Central Time”“A tight labor market has helped low-wage workers the most.
Between 2019 and 2022, inflation-adjusted hourly wages for the bottom 10 percent of wage earners nationwide will increase by 9 percent, According to the Economic Policy Institute. It was the fastest wage increase for minimum wage workers since 1979.
Smeeding said a shortage of workers is behind the increase, especially as the pandemic subsides and people start going out again. He expects this trend to continue as long as the labor market is tight.
“The good news is that now (with) the expansion of infrastructure and buildings, there is a lot of demand for low-skilled workers in addition to bars and restaurants,” he said.
What happened to leisure and hospitality, traditionally one of the lowest paying industries?
Menzie Chinn, a professor of public affairs and economics at the University of Wisconsin-Madison, said the wage gains have not been spread evenly across sectors of the economy.he pointed out leisure and hospitality workers Wages rose the most since the pandemic, while all other nonfarm sector workers saw wage growth slow.
“As far as we know, (leisure and hospitality workers) are beating inflation, at least when it comes to wage rates,” he said. “Right now, I don’t know how many hours they’re working, and it’s going to vary because not everyone is going to be working in a restaurant where wages are going up.”
In addition to wages, Laura Dresser, associate director of the COWS economic think tank at the University of Wisconsin-Madison, said the tight labor market also gives workers more leverage to negotiate more flexible hours with employers or face work Harassment on site.
Using national statistics, here’s what we think of real (inflation-adjusted) wages:
figure 1: Average hourly earnings $/hour (both deflated for CPI) in 2020 for the private sector (blue, left log scale) and leisure and hospitality (tan, right log scale). Dates of peak-to-trough recessions as defined by NBER are shaded in gray. Sources: BLS, NBER, and authors’ calculations.
