Who got the biggest raises as the pandemic subsided? Low-wage workers moving into low-wage industries
In the wake of the pandemic, low-wage workers got bigger pay increases for moving into the two industries that rely on them most: Leisure and hospitality and trade and transportation.
New Cleveland Fed research shows that workers earning less than the US median wage saw relatively large pay gains in those industries if they switched jobs. Same goes for a third industry, manufacturing.
But low-wage workers saw even bigger gains if they switched into those three industries. In mid 2022, for instance, their earnings were growing roughly 4 percentage points faster than earnings of similar workers who stayed in their jobs and 2 percentage points faster compared to those who switched jobs but not industries.
High-wage workers got a smaller pay boost from moving into the three industries, and it arrived later, according to the report’s authors, Daniell R. Carroll and Christopher J. Walker.
“As demand for labor ramped up in these industries in late 2021, wage growth also began to pick up, particularly for below-median-wage workers, as firms battled for a scarce pool of workers,” they write.
Read the Economic Commentary: Compression in the Wage Distribution During the Post-Covid-19 Labor Market
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The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.
The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
Media contact
Chuck Soder, chuck.soder@clev.frb.org, 216.672.2798
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