In another sign of a tightening labor market, wage increases for workers with only a high school diploma have outpaced those for college graduates by a record margin, according to a recent report from Oxford Economics.
“Over the past two months, they have received an average annual wage increase of 3.7% compared to 3.3% for workers with a bachelor’s degree,” wrote Bob Schwartz, senior economist at Oxford Economics, in a recent note to customers. “In this job market, you don’t need a degree.
While workers in the hospitality industry have resisted returning to their old low-paying jobs, employers are luring workers with raises and bonuses. The average hourly wage of leisure and hospitality workers fell from $ 16.55 in June 2019 to $ 18.23 in June 2021.
“Employers [are] Actually relaxing the requirements in terms of degree requirements… because everything is currently tied to labor shortages, ”said Daniel Zhao, senior economist at Glassdoor. “Many employers [are] have difficulty finding or retaining workers and therefore employers become more creative about which workers they would consider candidates.
Zhao predicts that this trend of wage growth will continue “for a while” as understaffing continues to plague sectors such as leisure and hospitality, which rely heavily on workers without a university degree.
“The job market should remain tight even as the economy reopens, because we can’t just flip a switch and get the millions of unemployed Americans on the sidelines now back to the job market,” Zhao said. “It will be more of a slow trickle.”
Leisure and hospitality employment is down 2.2 million, or 12.9%, from its February 2020 level, according to federal data. While workers with only a high school diploma have seen their wages increase more than those of college graduates, the overall career earnings of college graduates are more than twice as high as those of non-graduates. .
“We are unlikely to be in this kind of situation long enough for workers without a college degree to start earning more than workers with one,” Zhao said. “But it certainly changes the economic calculation. For many people, a college degree is a big step in the job market, but it’s also a very expensive decision.
Student loan debt has reached $ 1.4 trillion, and policies around repayment or cancellation continue to be political football.
Recent Oxford Economics salary data “could change people’s decisions about what degree they choose, what kind of school they attend, [and] if they’re looking for something more like a community college degree, which is often cheaper than a four-year degree, ”Zhao said.
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