We have been overlooking a major reason why many businesses in the hospitality industry are having difficulty attracting workers at pre-Covid wages.
To be sure, supplemental unemployment compensation from Covid relief legislation, the closing of many day care facilities and continued fear of contracting Covid are contributing to the difficulty.
But there is a larger and, indeed, ironic reason why hospitality workers have become harder to find. There simply aren’t as many of them. Here’s why.
For more than a generation now, states and communities, including our own, have been steadfastly promoting education to enhance personal well-being and the skills of workers. Efforts to get more kids to finish high school and more kids to go to college have been paramount.
The efforts have been fruitful.
Between 2000 and today, the number of people in the labor force age 25 and older who had completed no more than high school has decreased from 50.2 million to 43.7 million, while the number with a bachelor’s degree or more has increased from 36.6 million to 60.5 million.
That’s a 13 percent decrease in the number of workers 25 and older with at most a high school diploma and a 65 percent increase in the number with at least a bachelor’s degree in just 20 years. It’s a remarkable achievement.
More kids finishing high school and more going to college has had another effect. Between 2000 and today, while the U.S. the labor force as a whole has increased from 142.5 million to 160.9 million, the number of 16 to 24 years olds in the labor force has shrunk from 22.5 million to 20.2 million, a 10 percent drop.
Why the drop? 16 to 24 year olds are much less likely to be in the labor force if they are enrolled in school. More 16-24 year olds in school means fewer in the labor force. (Recall: you’re classified as in the labor force if you’re working or looking for work. If you’re neither working nor looking, you’re classified as out of the labor force.)
What does all that have to do with the hospitality industry?
The hospitality industry relies disproportionately on young workers. In the U.S., 12 percent of all employed workers are age 16 to 24, while the median age worker is 43. In the hospitality industry, 38 percent of employed workers are age 16 to 24, and the median age worker is 30.
The industry relies even more heavily on low-skilled workers regardless of age. According to the U.S. Bureau of Labor Statistics, the leading occupations in the hospitality industry are: counter workers, waiters and waitresses, cooks, first-line supervisors, food prep workers, bartenders, maids and housekeepers, dishwashers, and hosts and hostesses.
Those occupations alone accounted for 10.8 million of the 14.2 million workers employed in the hospitality industry in 2019, and, by the industry’s own standards, not one of those occupations requires more than a high school diploma.
You see the situation. Before Covid, the flourishing hospitality industry had been soaking up workers, adding 4.1 million to its payroll since 2000. The industry is now growing again and needs workers, but the two pools from which it draws more than 75 percent of its workers – young workers and low-skilled workers – have shrunk considerably because the country has been so successful at raising the educational level of its workers.
Long-term labor market shifts are gradual, but their effects are inescapable. 20 years of hospitality industry growth combined with 20 years of a shrinking labor pool will have its effect. We’re feeling it now.
Reg Murphy Center