The Washington Post reports that the average hourly pay for service industry and grocery store workers has now surpassed $15 an hour for the very first time. This is one of the most notable accelerations in wage growth since the 1980s, but as we’ve noted before, people aren’t exactly flocking back to their service industry jobs just yet. Employers are even digging deep into their applicant pools from years ago just to staff up their restaurants.
Large employers like Target, Costco, and Disney are significantly bumping up minimum starting wages, which likely means that smaller employers are soon to follow. That being said, this doesn’t mean every employer will pay that much, as the federal minimum wage is still parked at $7.25 an hour.
Other industries that are new to the $15 an hour arena include daycare services, liquor stores, fishmongers, and butchers. Those jobs that haven’t quite made it to $15 yet, like convenience store workers, have at the very least seen a 16.9% raise in wages throughout the pandemic.
Some companies have been adapting by adding a tip system where there previously wasn’t one. One Papa Murphy’s Pizza franchisee with locations in Kansas and Missouri added an online tip option to ordering, which has been bolstering starting wages of $10-$11 an hour, bringing them up to around $15 an hour.
What’s tough is that any ground gained by employees with these wage increases won’t go as far as you’d think. Since prices on necessities like gas, cars, and groceries have increased across the board, some analyses have concluded that the wage improvements aren’t doing much to stay ahead of them. One report, by former White House economist Jason Furman, senior fellow at the Peter Institute for International Economics, suggests that the gains have all been canceled out due to inflation.
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While inflation is temporary, it’s likely that wages won’t decrease along the way, so it seems like the bump to $15 an hour will be a permanent change to many people’s paychecks, and we won’t be going back anytime soon. It’s a start.