At the height of the pandemic, Sonia Vasile got a taste of financial security. Not living paycheck to paycheck, she paid her bills on time and built up savings — all while relying on generous unemployment benefits at the time.
Now as the economy reopens, Vasile, a laid-off waitress living with her parents in Wisconsin, isn’t jumping at the first job offered to her.
“Employers feel like they're giving us such an opportunity when it's like why would anybody take this?” Vasile said. “There's still a pandemic going on and you're expecting us to work for $2 an hour?”
Vasile is part of a labor reckoning that many retailers and restaurants that long paid lower wages are now facing as the economy restarts. Workers aren't returning in droves, with some becoming pickier for better-paying jobs and forcing companies to offer higher wages and sign-on bonuses to hire staff.
“Employers can't really expect to post jobs that are actually inherently different and harder than pre-pandemic,” Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, told Yahoo Money. “They can't expect to post them at the same wages, and get the same number of workers.”
Last summer, Vasile worked at a restaurant in New York when the city partially reopened, but she made just half of her old wages then because of lower restaurant capacity and reduced hours. Now in Wisconsin — where the minimum tipped wage is $2.33 an hour — she’s not sure she’d do much better. She also still worries about the health risks.
“Even without a pandemic, customers that come to restaurants are pretty gross… they’d sneeze right at you all the time,” Vasile said. “People would come in and they would think because the tables are six feet apart, I can just keep my mask off the entire time.”
‘Workers know the difference’
Job openings reached a record-high in March, rising by 8%, while hires only rose 3.7% for the same period, according to new data by the Labor Department. Accommodation and food services saw the largest monthly increase in job openings, adding 185,000 in March.
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Some employers are offering short-term bonuses and higher wages to attract workers. McDonald’s (MCD) is increasing its hourly wages "by an average of 10%" for more than 36,500 employees, while some franchises are offering sign-on bonuses. One location in Florida was giving $50 to anyone who would interview at the location.
Amazon (AMZN) also announced on Thursday that it’s providing workers with an average starting salary of $17 per hour plus a $1,000 sign-on bonus, depending on the location.
One-time sign-on bonuses may not be enough for workers like Emily Lessman, 26, who worked in environmental consulting before the pandemic hit and has a bachelor’s degree in science.
“I've worked service sector jobs which offered a sign-on bonus or a referral bonus or bonuses to get an increase in the pay,” Lessman said. “Nothing spectacular, they don't say they offer health care … nothing like that.”
Many service sector jobs also have changed since the pandemic began, and while offering short-term initiatives may help, raising the actual wage may be key in attracting workers, according to Shierholz. That appears to be happening to some degree.
The average hourly earnings for workers in labor and hospitality increased to $17.88 in April, up from the pandemic low of $16.92 in July and higher than the pre-pandemic level of $16.90 in February 2020, according to data from the Labor Department.
“Workers know the difference between a one-time signing bonus and an actual permanent, higher wage,” she said. “Employers who post pre-pandemic wages will have the most trouble, employers who post sign-on bonuses will have the second most trouble finding workers, [but] employers who raise wages will be able to get the workers that they need.”
‘That hasn’t stopped me from applying for jobs’
So far, 13 states plan to cancel several federal unemployment programs — including the extra $300 of weekly unemployment benefits — in an effort to get workers to return to the labor force.
“That hasn’t stopped me from applying for jobs,” Lessman said of the benefits. “I've applied to maybe 70 to 90 jobs within the last 400 days. I've been trying to find remote technical writing jobs or things that I'm qualified for that have a good pay-to-risk hazard.”
The unemployment benefits have also given Lessman and Vasile the time and opportunity to work toward a master’s degree, so they can better their job prospects.
“Because of the financial support the government provided, I was able to pursue a higher level of education, and still do everything else I needed,” Lessman said. “My next level job when I graduate or get a job in the summer — whenever that may be — is going to be better paid.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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