• Julie L. Hotchkiss
    Federal Reserve Bank of Atlanta and Georgia State University

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Summary:

Wage pressures among the newly employed in low-wage service occupations appear to be the result of normal economic forces, likely reflecting demand surges for—and a reluctant supply of—workers in occupations particularly hard hit by pandemic-induced economic shutdowns.

Key findings:

  1. There is evidence of significant wage pressures among low-wage service occupations.
  2. A combination of surging demand and reluctant supply appears to be driving current wage pressures.
  3. It's too soon to know if wage pressures will expand to other occupations.

The Center for Human Capital Studies

JEL classification: J2, J3

Key words: Labor demand, labor supply, reservation wage, COVID recovery, inflation pressures

https://doi.org/10.29338/ph2021-05