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A record-high 1 million restaurant and hotel workers quit in November — and it shows the labor shortage might really be a wage shortage

Willie B. Thomas/Getty Images

  • Amid labor shortages and the Great Resignation, new data shows a record number of Americans quit their jobs in November.
  • Quits in leisure and hospitality, typically a lower-wage industry, led the way, with over a million quits in November.
  • But hiring remains robust, suggesting that a wage shortage is pushing workers to find new opportunities.

In November, 4.5 million Americans quit their jobs — and 1 million of them are restaurant and hotel workers. 

That’s a record-high number of people quitting in a month overall, as well as a new record for the restaurant and hotel industry. But in a month where job openings dipped, and hiring remained robust, 1 in 16 leisure and hospitality workers in the US — 6.4% of the industry’s workforce — acted with their feet and left.

The latest Job Openings and Labor Turnover Survey (JOLTS) release from the Bureau of Labor Statistics shows the quitting and hiring situation in November 2021. All told, about 3.0% of the total workforce quit. As noted above, in leisure and hospitality, that figure was roughly double.

That stark divide in the quit rate for the low-wage restaurant and hotel industry — coupled with many job openings and robust hiring — suggests that the economy may be contending with a wage shortage, rather than a labor shortage.

“Lots of workers in those lower wage industries seem to be leaving jobs for greener pastures, where they can get higher wages,” Nick Bunker, the economic research director at Indeed, told Insider. 

Indeed, leisure and hospitality remains the lowest-paid industry tracked by the Bureau of Labor Statistics, with average hourly earnings of $19.20 as of November 2021.

“It is no wonder that workers are exiting the leisure and hospitality industry en masse,” Saru Jayaraman, co-founder and president of advocacy group One Fair Wage, said in a statement to Insider. “The last two years of this horrendous pandemic have been more than a hard time for restaurant and hospitality workers – especially tipped workers who have been struggling with a subminimum wage as low as $2.13 an hour federally.” 

As employers have struggled to hire in the post-vaccine era, wages in leisure and hospitality have skyrocketed during the pandemic, bringing them up to that $19.20 figure from $16.90 right before the pandemic. Anecdotally, raising wages has helped businesses hire and retain workers amidst reports of a labor shortage.

As seen in the above chart, average hourly earnings for workers in leisure and hospitality have grown 13.6% between February 2020, right before the pandemic, and November 2021. Earnings for private sector workers overall have grown just 8.8% over that period.

But even higher wages may not be enough to keep workers, with quits reaching those record highs.

“It’s time for employers to realize that it’s frontline workers like us who keep the doors open — and if they want us to keep showing up they need to respect us, protect us and pay us what we deserve,” Maribel Cornejo, a McDonald’s worker and leader with the Fight for $15 in Houston, Texas, said in a statement to Insider.

The number of people getting hired in leisure and hospitality still outpaces the number of workers quitting. However, low-wage workers might be taking advantage of their newfound position and switching jobs, according to Bunker — which could also mean that until the jobs those workers leave behind pay better, the industry could remain imperiled.

“If the industry is to survive, they need to raise the wage and pay tipped workers a full livable wage with tips on top,” Jayaraman said.

Bunker noted that the number of openings in sector has eased a little, and hiring has remained strong — indicating that it might be a bit easier to hire in the anecdotally worker-strapped field. It’s unclear if low-wage workers will continue to maintain their position as more people come back to the workforce and demand potentially eases.

But, for now, according to Bunker, lots of people — “especially in low-wage sectors” — are seeing a whole lot of demand for their services.

“They’re using that demand as a bargaining chip,” Bunker said, “and they’re cashing in — taking a new job and, for many of them, getting much higher wages.”

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