Amazon has announced plans to hire another 75,000 workers and will pay $1,000 signing bonuses in some locales. McDonald’s wants 10,000 new wage-earners in its company-owned restaurants and will raise pay by an average of 10 percent for the 36,500 workers already there. Olive Garden also has announced a more generous pay scale.
Applebee’s, IHOP, and KFC are among other corporate giants holding mass hiring events to satisfy a desperate need for help as restaurants reopen dining rooms, shoppers satisfy pent-up demand, and the economy continues to normalize.
Many restaurants are unable to maximize sales or stay open as long as they would like because they lack staff, the Wall Street Journal reported.
Restaurants and bars added 187,000 jobs in April, the U.S. Labor Department reported, but the sector is still short 1.7 million jobs since the 2020 economic lockdown.
The number of job postings in April rose to 8.1 million from March’s 7.5 million, the Job Openings and Labor Turnover Survey reported on 11 May, the third consecutive month of increases and well beyond economists’ estimates of 7.5 million.
To lure new hires, pay is rising: in April, average hourly earnings in the private sector edged up 21 cents to $30.17, the U.S. Labor Department reported.
The median hourly wage for fast-food workers in mid-2020 was $11.47, the department noted.
A hiring spurt in low-wage industries such as restaurants normally pushes down average hourly pay, analysts said; April’s rise indicates the leisure and hospitality sectors are broadly raising pay scales.
Grocers also are facing difficult decisions about worker pay.
Spikes in commodity prices are raising costs to grocers for everything from apricots to yogurt, leaving supermarket operators to balance pressure to raise prices against a desire to hold market share gained during the last year, the WSJ said.
“We’re going to have difficult conversations about how much [of cost increases]… we can accept because we’re not going to pass through all of it,” Albertson’s Co. CEO Vivek Sankaran said to the WSJ, “and we’re going to have difficult conversations up and down the supply chain.”
The rate at which people are quitting jobs was 2.4 percent in March, equaling a 21-year record high, the WSJ said.
“That sort of movement usually translates into companies thinking, ‘I need to retain staff; I’ve got to start paying more,” economist Jay Knightley at ING told the WSJ.
Last month, Amazon announced pay hikes for 500,000 workers, ranging from $.50 to $3 an hour, representing a billion-dollar investment in its employees; new hires now will earn an average of $17 an hour, up from the usual $15, the company has said.
The galloping economy should allow restaurant franchise owners some room to raise consumer prices to cover higher wages, the National Owners Association, a trade group for franchisees, wrote in a 9 May email to members, the WSJ reported.
Chipotle will jack wages at its 2,800 eateries to an average of $15 an hour by July, the company has said, and will increase prices on delivery orders to make up the cost.
“They’re able to offset the incremental cost of paying higher wages with charging a little bit more for a burrito,” William Ackerman, CEO of Pershing Square Capital Management, said at the WSJ’s Future of Everything Festival on 12 May.
TREND FORECAST: As the job hiring data and wages prove – and who’s doing the most hiring – the middle class in America is dead and dying. No longer the Land of Opportunity, the Bigs are in control and the Mom and Pop businesses are 20th-century history.
Legislation to raise the federal minimum wage from the current $7.25 an hour to $15 has stalled against Republican opposition in Congress; McDonald’s has vowed that all of its workers will be making at least $15 an hour before 2024.
However, after the Biden Bounce stops bouncing, we forecast there will be more artificial stimulus injected into the economy by Washington to inflate it and more money to the unemployed.
