Tourism workers are the lowest paid of any industry, FSU study says

Dive Brief:

Tourism employees are the lowest paid of all workers, a Florida State University (FSU) study found. Despite this discovery, tourism is Florida's leading industry; it supports 1.5 million jobs and has a yearly economic impact of $86 billion, FSU said. The study tracked wages nationwide and was published in the journal Tourism Management.
To find out how tourism workers' salaries compared to other workers' wages, Tarik Dogru, assistant professor at FSU's Dedman School of Hospitality, analyzed national wage data for about 12 industries between 2006 and 2018. Overall, the average weekly wage was $710, compared to $311 for leisure and hospitality workers. Professional and Business Services workers earned the most, with an average weekly wage of $1,162, he found.
An average $1 increase in pay across the whole economy generated just an 81-cent pay raise for workers in the hospitality industry, according to Dogru. "Nationally, wages are rising more in other industries than the hospitality industry," he said in a statement. He added that the wage gap was a competitive disadvantage for the tourism sector, hampering its ability to attract and retain talent.

Dive Insight:

High turnover and low wages are considered more common in the retail, food service and hospitality industries. But workers are in a tight labor market now, which gives them more leverage. Seventy percent of respondents in a 2018 TD AmeriTrade survey said that jobs are easier to find now than they were five years ago. Two-thirds of employees in the report said that low unemployment rates should generate higher wages, and millennials were the most likely generational group to ask for a raise.

The labor market has brought some employers — mainly those in high-turnover industries — to raise wages to compete for and retain workers. Labor shortages are pushing up wages, according to the latest ADP Research Institute Workforce Vitality Report. The second quarter of 2019 saw 4% year-over-year growth in U.S. workers' pay, the report showed.

Employers could also use personalized benefits and variable pay options, like bonuses in lieu of pay increases, to attract and retain talent, but the tourism industry might not have a choice but to offer higher wages to compete. Dogru noted that phasing out the tipped wage in industries that often rely on it, such as hospitality and food service, might also close similar wage gaps — if businesses can pay out the difference and still stay afloat.