Earnings

Why Are We Surprised that Hospitality Workers Are Moving to Other Sectors?

By Diana Dayoub

Hospitality and leisure workers(1) made headlines recently seeking higher pay and better work conditions in other sectors.(2) Companies in these industries reacted by offering astounding increases in pay to lure workers back into these jobs, with the hourly rate averaging $18.7 for the period of June-September of this year, a record high for the industry and an increase of 10.7% from March 2020.(3) It remains to be seen whether this financial incentive will work, but I argue  that businesses in the hospitality and leisure sector ought to consider more than just pay if they wish to keep their employees.

Weekly Earnings of Hospitality Workers vs. the Laborforce

(2021 Dollars)

To understand why workers are leaving the industry, it might be helpful to look at work conditions in the hospitality industry prior to the pandemic. The first aspect, and most oft cited in the news, is pay. The Bureau of Labor Statistics (BLS) reports median weekly wages consistently hovering around $602 during the past two decades. While this is below the median pay of all wage earners in the workforce, the figure was still painting a relatively rosy picture. But examining the BLS’s methodology, one quickly realizes that the reported median earnings are only for full-time workers — excluding the large number of part-time employees. The implications of this are colossal. If a full-time worker was to transition to a part-time role or lose their job, the BLS figure would spike, giving the false sense that things are ameliorating for workers. This is particularly problematic in the case of the hospitality sector. The Current Population Survey shows that, in the past two decades, 34.4% of work in this sector was performed part-time. Matters only get worse when you consider that 33.1% of those working part-time are doing so for economic reasons.(4) This is shocking when you learn that only 15.1% of workers in the general population worked part-time in our two-decade period of interest. Taking this into account, LISEP’s median earnings for both full- and part-time workers for the same period is a staggering $401. At this rate, a 9-5 worker who doesn’t take a single hour off all year makes less than $25,000.

Percentage of Workers in Hospitality

By Work Status

But the pay of hospitality workers is just one part of the problem. Work conditions in the industry are lamentable, which is likely to be contributing significantly to the exodus of hospitality workers. The industry’s businesses have long been known to put intense pressure on their workers, straining workers’ family ties and their mental health in general. In an article sounding the alarm about extenuating circumstances of hospitality workers, the Chicago Tribune reported that “employees often work varying shifts and managers routinely work longer hours than scheduled, especially during peak travel times or when multiple events are scheduled. Even more, most hoteliers are called in to work on short notice in the event of an emergency or to cover a position.”(5) In recent years, a literature has showed that hospitality workers experience “family-related stress” because of unpredictable hours.(6) In fact, a 2011 study showed that hotel workers were stressed 40-62% of days.(7)

Given this, it should come as no surprise that 53.5% of hospitality workers since 2000 were single and never married. This can’t be explained away by workers being too young for marriage or children; 38% of hospitality workers age between 25 and 45 years old and among those, 40.5% were single or never married. For some, this might be a personal choice, but there is something to be said about the marriage penalty the industry presents workers with. The celibacy rate for workers in this age bracket employed in other sectors is 27.7%, which means that a worker in the hospitality sector is 46% more likely to be single.

Percentage of Workers in Hospitality

By Marital Status (Age 25-45)

This plummeting marriage rate becomes more intuitive when you consider the mushrooming of mental health guides online for hospitality works. A case in point is one titled “A Mental Health Guide for Beverage and Hospitality Professionals,” which gives tips for battling anxiety, isolation, and substance abuse — common maladies for hospitality workers.(8) It seems we have arrived at a tipping point where workers are unable to stand the work stress and interruption in their personal lives. The recent trend in transitioning away from these jobs should thus be seen as a long-awaited escape.

The pandemic only made these industry trends worse. In addition to pandemic-induced job insecurity,(9) hospitality workers generally had no choice but to work in person, unlike workers in other sectors. Indeed, it is estimated that during the pandemic, fewer than 10% of hospitality workers could telework.(10)

The hospitality industry has a long road ahead of it to try to better the work conditions for its workers. Pay is only a first step, but structural changes must be implemented to rid the industry off its stress-generating, mental-health-draining reputation.

October 22, 2021
  1. The leisure and hospitality sector is defined by the Bureau of Labor Statistics: https://www.bls.gov/iag/tgs/iag70.htm
  2. https://www.travelpulse.com/news/features/half-of-hospitality-workers-say-they-wont-return-to-their-old-jobs.html
  3. https://www.bls.gov/iag/tgs/iag70.htm#earnings
  4. Working part-time for economic reasons is due to labor market conditions. This means that workers were nominally working full-time for less than 35 hours a week, had a labor dispute that forced them to work part-time, or were forced into part time due to labor market conditions. This is in contrast with non-economic reasons for part-time work such as childcare, being a student, vacation, illness etc.
  5. https://www.chicagotribune.com/lifestyles/ct-tribu-busy-couples-balance-20120331-story.html
  6. https://journals.sagepub.com/doi/10.1177/1096348007299919
  7. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3686125
  8. https://daily.sevenfifty.com/a-mental-health-guide-for-beverage-and-hospitality-professionals
  9. https://www.mdpi.com/2199-8531/7/1/30
  10. https://www.brookings.edu/research/reopening-america-low-wage-workers-have-suffered-badly-from-covid-19-so-policymakers-should-focus-on-equity