Hospitality and Leisure Sector Sees Big October Job Gains, Still Faces Severe Staffing Shortage

Nearly 3 million people who left the workforce during the pandemic have not returned, leaving employers competing for scarce job applicants and driving up wages.

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The Bureau of Labor Statistics reported Friday the U.S. economy added 531,000 jobs in October and the unemployment rate fell to 4.6% -- a new pandemic low and better than economists’ expectations.

October’s gains represented a sharp pickup from September, which gained 312,000 jobs after the initial Bureau of Labor Statistics estimate of 194,000 saw a substantial upward revision in Friday’s report.

“The economy is going in the right direction,” said Bottomline Marketing founder and San Diego State University marketing professor Miro Copic. “We're doing pretty well and recovering all these jobs that were lost.”

The leisure and hospitality sector led the way, adding 164,000 jobs as Americans ventured out to eating and drinking establishments and went on vacations again as Covid numbers fall -- the industry reclaiming 2.4 million positions lost during the pandemic.

“That was a really big turnaround because during the summer in July, August, September, the Delta variant really shut these industries back down,” said Copic. “A lot of people who stayed on the sidelines because of COVID are now starting to come back in.”

Michael Strickland, front desk supervisor at Little Italy’s Porto Vista Hotel, told NBC 7 he’s seen the economic boom from more people traveling and staying at the hotel, but he couldn’t say the same for job applications.

He said the 200-room hotel that normally employs between 45 and 55 people is staying afloat with a staff of roughly 15, and the management has been trying for months to fill the void.

“They’re trying, they’ve got ads out, we’re marketing,” Strickland said. “We just don't have people coming in anymore.”

Strickland said because the hotel is so short-staffed, the employees it does have must wear many hats, something new hires aren’t willing to do when so many other industries are also hiring, sometimes for more pay.

Copic agreed, saying average wages in October were up 4.9% from a year ago, but for many workers, that's not enough.

Nearly 3 million people who left the workforce during the pandemic have not yet returned, leaving employers competing for limited job applicants and driving up wages, especially in traditionally low-paid industries.

“It’s very frustrating for some employers, especially those looking for low skilled jobs,” he said. “They're really struggling to fill a lot of positions, because so many people are still on the sidelines and it has nothing to do with government benefits. The rate of unemployment did not improve at all in states like Texas, Florida, South Dakota, Mississippi, that took away federal benefits for unemployed workers before California did.”

Even with last month's solid job gains, the economy is still 4.2 million jobs short of where it was when the pandemic began.

“We’re going to see half a million jobs being created on a monthly basis or around there,” Copic said. “We're going to see a return to the pre-pandemic level of jobs sometime in the mid to late summer of 2022.”

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