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Fun Summer Plans? Get in Line

Author: Liz Anderson
15 Jun 22

Consumers are geared up to spend this summer. Facing labor shortages, businesses may have difficulty keeping pace.

Summer is upon us. School’s out, vacations are beginning, and people are ready to hit their favorite seasonal locales. However, facing a labor shortage, businesses might have a hard time keeping up this summer. Headed into the hiring season, job openings were nearly double the amount of unemployed persons, signaling a tight labor market with strong competition for qualified workers. 

Narrowing in on the latest JOLTS numbers, the leisure and hospitality sector – an integral piece of the summer economy – faces a notable gap between the openings and hiring rate. In April, the openings rate remained high at 8.9%, a signal of high demand for workers. Hires lagged slightly, at 7.2%; those openings are not translating to an adequate number of hires. The quits rate is high here at 5.2%, suggesting workers have increased power and options in this hiring environment. These latest JOLTS numbers are from April, but if these trends hold, tourists’ favorite hotels, restaurants, and bars will be pressed for workers this summer.

What does this mean for Consumers and Workers?

Consumers already grappling with high inflation may experience shocks beyond increased travel prices. Labor shortages create long lines, less services, higher prices, and general frustration for travelers. COVID-19 restrictions have been lifted across much of the country, ushering in hopes for a “normal” summer. Consumers anticipating that shift might be surprised by the lingering impacts of COVID on the labor market and consequently, their summer plans. 

Workers hoping for seasonal employment find themselves in an enviable position: potential wage increases, a bevy of employment options, and increased power to quit for a better offer elsewhere. Employers facing labor shortages could offer sign-on bonuses and other benefits that seasonal employees have not often seen in past years. 

Although this summer may be less affected by COVID in the obvious ways – travel restrictions, mask mandates, etc. – consumers and businesses will still be feeling the effects of the restructured labor market that followed the 2020 COVID recession. If you’re looking for fun in the sun this summer, you may have to wait in line.

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