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Restaurants continued adding jobs in May

The industry added another 46,100 jobs last month, according to new federal data, but remain 700,000 short of pre-pandemic levels.
Restaurant jobs May
Photo by Jonathan Maze

The industry continued its run of steady, post-pandemic hiring in May and used higher wages to lure workers, based on new federal data released on Friday.

Restaurants and bars, otherwise known as food services and drinking places, added 46,100 jobs during the month, according to the U.S. Bureau of Labor Statistics. That continued a run of steady hiring for the industry that has largely continued unabated despite multiple surges in the coronavirus.

Despite this, the industry remains well behind where it was before the pandemic. The industry as a whole employs 11.6 million workers, down from 12.3 million in February 2020, before widespread shutdowns led to massive layoffs.

Nevertheless, widespread worker shortages have led to rising wage rates. Wages for leisure and hospitality workers increased another 0.8% in May from April and are up 12% over the past year. The higher wages have contributed to growing inflation that has led to rising menu prices.

Restaurant and bar jobs

Source: U.S. Bureau of Labor Statistics

Labor shortages are due in part to lower labor force participation as able workers sit on the sidelines of the job market. The labor force participation rate was 62.3%, which was little changed from April. It remains 1.1 percentage points below where it was in February 2020.

That said, fewer people are sitting on the sidelines because of the pandemic: 455,000 workers were prevented from looking for work because of the coronavirus, the Labor Department said, down from 586,000 in April.

Still, the continued hiring at restaurants is a sign of growth for the industry despite mounting concerns about the impact of inflation on consumers—and of thinning margins on operators. In addition to higher labor costs, food costs have been soaring, as have costs for rent, construction and equipment, which has hurt profits.

Overall, the economy continued to add jobs, which is helping fuel general restaurant industry health. The economy added 390,000 jobs in May. The unemployment rate was 3.6%.

One other number of note for operators: The percentage of people who work from home continued to decline last month, to 7.4% from 7.7% in April. That decline means more people are going into offices, which has helped demand return for lunches near office parks and business centers. It has also led to a refocus of companies on catering, including concepts like Smashburger and Subway.

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