The Hospitality Industry is Recovering

May 31, 2021

Despite the public outcry and ominous national data, Dr. Enrique Lopezlira, the director of the Low-Wage Work Program at the University of California Berkeley Labor Center, maintained that the reports of a labor shortage were contrary to the statistics presented by the government.

Lopezlira said, “While media outlets have reported anecdotal evidence of businesses experiencing labor shortages, the latest labor market data does not show that this is in fact the case. This is especially true in the leisure and hospitality industry – which includes restaurants – where most of the anecdotal evidence is coming from.”

In particular, the industries that complained the most about labor shortages had in fact achieved “notable gains” during the month of April, according to the Labor Department, adding 331,000 jobs in April while other industries, mainly temporary help services, had a net loss. Despite those gains, the leisure and hospitality industries are still well below pre-pandemic employment levels – down 2.8 million jobs or 16.8% nationwide – despite having added 5.4 million jobs this year. 

In California, the labor market seems to be rebuilding as the state recovers from the effects of the pandemic.

“Leisure and hospitality, along with other services, were the hardest hit sectors during the pandemic,” Lopezlira said. “However, these sectors have accounted for over two-thirds of California’s job gains over the past three months. Overall, the latest jobs data show a labor market that is improving but still has a long way to go until full recovery.”

However, Lopezlira did acknowledge that some laborers were not returning to their jobs.

Lopezlira said, “Currently, there are about 4 million workers nationwide who left the workforce during the pandemic and have not returned, with about half a million of those workers in California. It’s hard to identify one single reason for these workers remaining on the sidelines, but it’s probably due to a number of factors. For instance, some workers are taking care of children or elderly relatives, while others may have health concerns about returning to work, particularly if the job involves interacting with the public and doesn’t offer paid sick leave.”

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The Hospitality Industry is Recovering