US Grocery Store and Restaurant Workers' Wages Surpass $15 for the First Time...Concerns Over Prolonged Inflation

Record High Wage Increase Due to COVID-19
Wages in Customer Service Industries Like Restaurants and Marts Up 10.5%

[Asia Economy Reporter Yujin Cho] The average wages of workers in U.S. restaurants and grocery stores have surpassed $15 per hour for the first time in history. The COVID-19 pandemic has driven worker wages to record highs, setting a new milestone in the U.S. labor market. However, concerns are growing that this wage increase could lead to prolonged inflation amid fears of economic slowdown due to the spread of the Delta variant.

On the 8th (local time), The Washington Post (WP) reported that 80% of all U.S. workers now earn wages above $15 per hour.

The average hourly wage across all industries in the U.S. is $25.83, marking a 7.8% increase compared to the pre-pandemic period. Particularly, in the hospitality sector such as restaurants and grocery stores, the average wage for non-managerial positions (employees) rose by 10.5% after COVID-19, showing the largest increase.

Before the pandemic, the average hourly wage for restaurant employees was $13.86, but as of the end of June, it rose to $15.31, and grocery store employees saw their wages increase to $15.04. Additionally, the average hourly wages in retail and service industries such as office supplies sales, liquor sales, parking attendants, daycare services, and care services for the elderly or disabled also exceeded $15.

The most direct reason for the wage increase is the labor shortage. As the COVID-19 situation stabilized and consumption rapidly increased with economic reopening, a hiring war broke out across the U.S.

Especially in sectors like retail, hospitality, and leisure, which had laid off millions of workers during the pandemic, wage increases were offered to attract workers back to their jobs, accelerating the pace of wage hikes.

During this period, the amusement park chain Boom Park, located in California, Florida, and New Jersey, raised employee wages to $15. Some areas reported that despite wage increases, only 75% of rides were open due to insufficient staff.

The average wage increase was led by large corporations. As competition in the labor market intensified, companies like CVS, Target, Best Buy, and Costco announced plans to raise their minimum wages from $11 to $15 by next summer.

WP analyzed that this pace of wage increase is the fastest since the early 1980s, with wage hikes by large corporations spreading to local retail stores, leading to wage increases across the industry.

The problem is that such wage increases could lead to prolonged inflation. Severe job bottlenecks have been followed by record-high wage increases, which are expected to contribute to sustained inflation.

Since wages tend not to fall once they rise, even if job bottlenecks are resolved, the high wage situation may persist.

With the recent spread of the Delta variant raising concerns about economic slowdown and ongoing inflation, fears are growing that employment and the economy could enter a recession.

Ian Linsen and Ben Jeffrey, market strategists at BMO Capital, said, "If the spread of the Delta variant delays workers’ return to the workplace and the high wage situation continues, the persistent inflation will prevent achieving employment targets, posing a significant challenge to central banks."

This content was produced with the assistance of AI translation services.