Wage mobility in the hospitality industry

MSNBC has a report from Forbes recently came out with a list of America’s best and worst paying jobs. While the top end was predictably taken by doctors (with surgeons leading the way) unfortunately and also predictably, a majority of the lowest paying jobs were in the food service industry including hotels. Scraping the bottom of the barrel were fast-food cooks with a mean annual salary of $15,230. Even though the Census bureau puts the poverty threshold at approximately $12.5 K per year, in most if not all parts of the country, $15.2K puts a family squarely in the church mouse category.

But what the report does not account for is mobility in wages. Like the transport sector the food service industry (and hotels) provides, although grossly inadequately, transitions out of low wage earnings via intra and inter-firm mechanisms. The volatility in employment and low retention accounts for the latter while large firms have a not-insignificant ratio that moves on to higher paying wages. The ability to develop a horizon that includes a transition out of low paying jobs via the employer can and will contribute to employee retention. The industry’s high turnover and resultant costs ought to warrant greater studies on providing opportunities for employees to exit with a combination of skills and employer sponsored training.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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