The Balance examined the JOLTS (Job Openings and Labor Turnover Survey) data and wage statistics from the Bureau of Labor Statistics (BLS) and the Census Bureau to determine regional and industry trends in wage growth and employees voluntarily leaving their jobs.
Wage Growth Tracks With High Quits Rates, but Not Everywhere
The leisure and hospitality industries drove both increases in labor turnover and wage boosts. Those sectors include accommodation and food services, art, entertainment, and recreation. Leisure and hospitality workers make up large portions of the workforces in the South (39% as of October 2021, the most recent data available) and West (25%) regions of the United States. Comparatively, 20% or fewer of workers were employed in the same industries in the Northeast and Midwest. As the labor market has continued to tighten, the monthly quits rate has been consistently higher in 2021 than it was in 2020, often growing from month to month. In October 2021, 4.2 million people quit their jobs, a slight decrease from the record high of 4.4 million in September. The October quits rate in leisure and hospitality was 5.7%, the highest of all industries. The national quits rate for October stood at 2.8%. And good news for residents of Southern and Western states: Regions with higher quits rates also saw higher levels of wage growth. According to the analysis, Kentucky had an above-average quits rate and experienced the highest wage growth among all the states, standing at nearly 8%. Workers in the Northeastern states of Connecticut and New Jersey quit at lower rates and saw some of the smallest wage increases in the last year, rising less than half a percentage point. But the trend isn’t strong everywhere. In a handful of states, workers are quitting and barely seeing their wages change. And in Hawaii and Washington, D.C., wages contracted despite turnover in September (the most recent data as of this writing). Hawaii actually saw the highest percentage of workers voluntarily leaving their job, and hourly wages declined 0.06%.
There Are a Lot of Jobs, but Who Wants Them?
The number of job openings hit record highs in the last few months, soaring to 11 million in October. With the number of job openings on the rise, employers have struggled to find workers. In an effort to attract employees and retain existing talent, some businesses have offered perks and incentives like hiring bonuses and increased flexibility in work hours or location. They have also started to increase wages. Industries hit hard by labor shortages have experienced some of the greatest upward pressure on salaries, with leisure and hospitality workers seeing the biggest wage bumps in the last year, leaping over 11% from October 2020 to October 2021. In comparison, the entire private sector only saw wage growth of nearly 5%. But despite rising wages, leisure and hospitality workers still have the lowest hourly pay, earning just over $10 less an hour than the average private sector employee. It has remained a mystery to many why workers are quitting at such high rates amid the ongoing pandemic, even after federal unemployment benefits ended in September. With states looking to businesses to enforce mask mandates, and consumers angry over supply chain woes, it is believed that public-facing employees no longer want to police customer behavior while receiving low pay. The Association of Flight Attendants has highlighted spiking cases of unruly passengers, citing mask mandates as one of the causes, while a retailer’s union asked customers to be kind to workers as they did their holiday shopping. The pandemic has also shifted worker attitudes toward their jobs. More than half of workers whose jobs can be done remotely said they wanted to continue to work remotely after the pandemic ended, a Pew Research Center survey found, and workers defined by the researchers as “lower-income” had greater fears of coronavirus exposure at the workplace. According to The Balance’s analysis of BLS data from the Current Population Survey data, workers in the leisure and hospitality sector have some of the lowest remote-work rates. Because of those shifting attitudes and concerns, it might be a long time before hotels, restaurants, and other businesses in the leisure and hospitality industry can persuade workers to come back. Despite the sluggish pace of the labor market recovery, November’s jobs report did show signs of strength, as the unemployment rate dropped more than expected to 4.2%, while the labor force participation rate, defined as those working or seeking a job, crept upward.
Methodology
National, U.S. Census region, and industry-level quits rates data was sourced from the Bureau of Labor Statistics Job Opening and Labor Turnover Survey released Dec. 8. State-level quits rate data was sourced from the Bureau of Labor Statistics Job Opening and Labor Turnover Survey released Nov. 19. Industry-level wage growth was sourced from the Bureau of Labor Statistics Current Employment Statistics Program released Dec. 3. State-level wage growth was sourced from the Bureau of Labor Statistics State and Metro Area Employment, Hours, & Earnings Program released Nov. 19. Estimates for the number of workers in the BLS Leisure and Hospitality Supersector by Census region were sourced from the Bureau of Labor Statistics State and Metro Area Employment, Hours, & Earnings Program released Nov. 19. Telework rates by industry were sourced from the Labor Force Statistics portion of the joint BLS-Census Current Population Survey.
