Since at least the Great Recession of 2007-09 and the financial crisis that accompanied it, the COVID-19 epidemic is altering the US labor market more than any other single event. According to government data, employers lost approximately 20 million jobs in the USA in March and April 2020, and payroll employment has yet to rebound to pre-pandemic levels.’
Workers are resigning at an all-time high, especially in lower-paying industries like Costco retail and foodservice, and many companies are scrambling to find replacements by offering raises and bonuses.
That's the big picture, at least. However, pay increases have been unevenly dispersed across the workforce, with workers in some areas and industries getting far smaller increases than those in others. Sharply increased inflation has also decreased employees' real purchasing power. The focus of this study is on average weekly income and employment levels in the private sector, which employs around 85 percent of Americans.
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According to the most recent available data from the federal Bureau of Labor Statistics Quarterly Census of Employment and Wages, nearly two-thirds of U.S. private-sector payroll workers (63.6 percent) work in industries where the average weekly wage in the second quarter of 2021 was at least 5% higher than it was in the second quarter of 2020.
Since the second quarter of 2020, when much of the sector was either shut down or severely reduced due to the pandemic, the "accommodation and food services" sector – which includes restaurants, bars, hotels, and other establishments – has had the largest growth in average weekly wages. After falling 4.9 percent between the second quarter of 2019 and the same time in 2020, the average wage for workers in this industry increased 18.4 percent to $482 per week. Over the same time period, average employment in the sector fell by 38%. Despite recent wage improvements, however, this remained the lowest-paying sector.
The "accommodation and food services" sector – which includes restaurant jobs, bars, hotels, and other facilities – has seen the most growth in average weekly salaries since the second quarter of 2020, when much of the industry was either shut down or significantly reduced due to the epidemic. The average wage for workers in this business grew 18.4 percent to $482 per week in the second quarter of 2020, after declining 4.9 percent between the second quarter of 2019 and the same time in 2020. Over the same time period, the sector's average employment declined by 38%. Despite recent wage increases, this is still the lowest-paying industry.
Between the second quarter of 2020 and the second quarter of 2021, average weekly wages in the information sector increased 12.3%, reaching $2,740, almost as much as they increased in the same 2019-20 period. Between mid-2020 and mid-2021, management pay increased by 12% on average, to $2,513 per week, after remaining practically steady the previous year.
Not only were pandemic-related job losses in the information and management sectors smaller than in the accommodation and food services sectors – possibly because many more information and management workers could work from home – but by the second quarter of this year, those two high-paying sectors had regained the majority of the workers they had lost. Employment in the lodging and food services, on the other hand, was still 15% lower than it was in the second quarter of 2019.
Financial transaction processing and clearing led the wage growth in the grouping of industries, which employs 106.6 million people. Between the second quarter of 2020 and the second quarter of 2021, the average compensation for the 126,000 or so people employed in that business more than quadrupled, from $2,110 to $4,247. Local couriers and delivery workers (up 92.6 percent), new car dealers (up 40.4 percent), and dentists' offices were also among the top industries (up 27.6 percent ).
Many of the industries in this subgroup that saw the largest wage increases between the second quarters of 2020 and the second quarters of 2021 suffered wage losses in the early months of the pandemic. For example, average dental worker wages were 13.3 percent lower in the second quarter of 2020 than they were a year earlier.
As a result, we chose to compare wages in the second quarter of 2021 to the same period in 2019, to identify where the most significant overall gains were. Local messengers and delivery employees were the big winners this time, with their average weekly income more than doubling from $680 to $1,437 over the study period. With a two-year increase of 96.6 percent, financial transaction processing and clearing were close behind. Computer and peripheral equipment manufacturing increased by 40.1 percent, new car dealers increased by 38.5 percent, and a non-bank lending sector led by mortgage lenders increased by 38.5 percent (up almost 35 percent).
