Friday, 8 December 2023
Updated on Monday, January 31, 2022
The COVID-19 pandemic has presented businesses with an almost unlimited number of challenges over the past two years, from overcoming supply chain disruptions to managing health and safety standards.
But within that churn and disruption, certain industries have seen a boom in demand for their services — and it’s been hard to catch up. The latest MagnifyMoney study compares employment growth to wage growth to find the industries with the largest labor shortages.
The study finds that wages grew the fastest compared to employment in the accommodation industry. This means that hotel desk clerks, housekeeping cleaners, waitstaff, and others who have been recently hired or have managed to keep their jobs through the pandemic might have slightly more opportunities to boost their savings.
As more people have decided that it’s once again safe enough for them to travel and stay in hotels or other types of lodging, the accommodation industry has started to recover from a challenging last two years.
Unfortunately, despite this recovery, many employees in the industry have been reluctant to return to work and have instead opted to head to industries with better pay and working conditions.
As a result, employers are stuck between a rock and a hard place. They’re forced to hire from a smaller pool of employees at higher wages or risk losing so much business that they can never recover. Ultimately, the mismatch between the supply of and demand for workers in the industry, combined with the willingness of some employers to take somewhat desperate measures to stay afloat, has caused wages for accommodation workers to rise significantly.
Even with global supply chain issues making it harder for many dealers to get access to vehicles, millions of Americans have nonetheless been eager to purchase a car. In fact, revenues generated from both new and used car sales hit record highs in the first half of 2021.
Though dealers have tried to bring on more workers to deal with this influx of business, they’ve struggled to find enough people to satisfy their demands. As a result, some have likely had to increase wages to attract new workers and/or retain the workers they already have.
It’s also important to note that because salespeople who work for motor vehicle dealers are often paid on commission, their earnings are also likely rising, due to these increased car sales.
Being cooped up in their homes for months on end through much of the pandemic, many people turned to entertainment — in particular, reading books as a form of escape. This resulted in the physical publishing industry having a good last two years.
Despite this, the industry hasn’t seemed to have had much luck boosting the number of people it employs. Though it’s difficult to nail down why this is the case — one explanation could be that too many people with specialized skills are retiring — the industry’s sub-2% employment growth in the face of increasing demand speaks for itself.
Based on how much their wages have grown, it seems that those who continue to work in the physical publishing industry have been able to leverage their increasingly unique and/or specialized skill sets to get more money from their employers.
As people began ordering more and more goods throughout the pandemic, the warehousing and storage industry has grown steadily and has hired more workers to keep up with increased consumer demand.
Unfortunately for workers, the industry provides a clear example of how higher profits don’t necessarily equal higher wages. Driven by the incredible bargaining power of some major employers, as well as the potential for further increases in automation, wages throughout the industry have remained stagnant.
Ultimately, it appears as though warehousing and storage employees lack the bargaining power necessary to substantially increase their paychecks.
Though wages have risen slightly more than average in the courier and messengers industry, their growth hasn’t been on par with the industry’s rapid increase in employment.
However, there is some evidence to suggest that this trend might be changing. For example, owing to a truck-driver shortage, companies are finding it harder to deliver goods and are showing more willingness to turn to alternative sources of labor to make ends meet.
This trend, combined with increased revenue in the industry, suggests that employers could start boosting wages even further to find more employees and keep up with customer demand. Of course, they may instead opt to refuse to increase wages while conditioning consumers to accept worse service.
As was the case in many other industries, the pandemic resulted in the broader sports, hobby, musical instrument, and bookstore industry seeing a substantial increase in sales. While this increase prompted the industry to hire a large number of workers, it hasn’t resulted in significantly higher wages for those workers.
There are many possible reasons why. For example, retail employers are typically easy to replace and plentiful, making it harder for them to negotiate higher wages. Beyond that, this industry’s growth has been stagnant for well over a decade and even showed signs of decline before rebounding during the pandemic.
Because of this, employers might be attempting to keep wage growth to a minimum to save money and prepare for what could be perceived as an inevitable return to pre-pandemic norms.
Because many industries have shown a willingness to increase employee wages, now can be a good time to negotiate a higher salary. Here are three tips that can help you do that:
To find the industries with the largest labor shortages, analysts looked at data from the U.S. Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages. Researchers used data from the first half of 2020 — January through June — and the same period in 2021.
Researchers ranked the nation’s 50 largest industries in total employees by their percentage point difference between employment growth and wage growth. The industries where wages were growing fastest relative to employment were considered to have the largest labor shortages.
Source: https://www.magnifymoney.com/blog/news/wages-employment-study/
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