The restaurant industry has long recovered the jobs they cut in March and April 2020 when they were forced to close for dine-in service, right. Right?
Maybe not.
On Wednesday, the U.S. Bureau of Labor and Statistics issued preliminary revisions to jobs data for the year ended in March, something it does annually to ensure accuracy in the numbers. It will make a final revision in another six months.
This year’s revision was particularly harsh: 818,000 jobs. That means the economy had 5% fewer jobs in March than it initially recorded. Such revisions can be large, though this one appears to be the largest in years.
This year the numbers revised downward the government’s estimate for leisure hospitality jobs by 150,000, meaning those businesses has 0.9% fewer jobs than initially estimated. That means leisure and hospitality businesses employed 16,743 workers in March, rather than the reported 16,893.
The data does not show restaurants specifically. But restaurants account for 73% of leisure and hospitality employees. The numbers imply that restaurants employed 117,000 fewer that month than initially estimated.
That suggests the industry employed 12.2 million workers in March.
Job growth in restaurants has been generally slow in recent months as sales and traffic weakened. Assuming that remained the case, it means restaurants and bars employed 12.24 million workers in July, based on the latest data and adjusted for that revision.
We might not normally think about all this much. The Labor Department makes such revisions all the time and they can be up or down depending on a variety of factors. But this was a notable revision.
And it means the industry probably hasn’t recovered pandemic-era job losses.
The restaurant industry hit its jobs high point in February 2020, when it employed 12.29 million workers.
That means restaurants and bars may still be 50,000 workers short of where it was in 2020.
All this is still preliminary and who knows what the data will ultimately reveal.
But there are a few takeaways.
First: It’s worth reminding that, nearly five years later, the pandemic was a singular event in restaurant industry history and one that was devastating for a huge swath of its workforce. Restaurants culled half of their workers from their payrolls between February and April that year. It’s insane to think about.
Second: Hospitality industries have been even more cautious about hiring than it has seemed in recent years, a clear result of rising labor costs.
Restaurants were forced to learn to do with less during the pandemic. That continued as higher wage rates drove up the cost of hiring. A shift to takeout in the years since also meant the broader industry didn’t need as many workers.
Third: Restaurants are now in recession, driven largely by consumer reaction over those price increases. That, coupled with financing challenges, likely means it could be a while before employment eventually does catch up with where it was four and a half years ago.
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