The trend: Roughly 30 million workers typically join the labor force over the summer for jobs in restaurants, stores, and hotels serving US consumers taking breaks from work and school.
- But with roughly two jobs available for every unemployed person in the US looking for work, the tight labor market is making it difficult for retailers and restaurants to add staff.
- The situation could lead to limited services, waiting lists, and higher prices, per The Wall Street Journal.
Wages are up: Wages have been rising for the past year, as a slew of workers have quit their jobs in search of higher pay, leaving employers scrambling to staff up.
- In April, the average employee’s hourly wage was up 5.5% year over year, according to the Bureau of Labor Statistics.
- Those increased wages are eating into retailers’ and restaurants’ bottom lines, a challenge which a range of companies—including Red Robin Gourmet Burgers, The Gap, and Jack in the Box—cited in their recent earnings calls.
Pay up or else: Several companies are making major pushes to hire workers to ensure they can meet consumer demand.
Walmart in March shared its plan to hire more than 50,000 US associates in its stores and supply chain facilities.
Apple increased the starting wage for its US retail employees to $22 an hour.
Subway announced plans to hire more than 50,000 new workers as part of a nationwide program.
Yet challenges remain. While restaurants and bars have brought back many of the jobs that were lost earlier in the pandemic, employment in the sector is still below February 2020 levels despite demand hovering near pre-pandemic levels, per the Journal.
The big takeaway: While the climate is ripe for strong retail growth this summer, companies’ inability to hire enough seasonal workers could make it hard to hit their targets.