A look into the labor market

The ongoing pandemic has had a significant impact on labor markets in every state, economic sector, and demographic in the country. Since January of 2020, the leisure and hospitality sector has lost the most jobs and exhibited the highest unemployment rates. The hospitality industry bore the brunt of the pandemic’s economic effects and is not forecasted to recover to pre-pandemic levels until 2024.

In recent weeks, the strengthening economy has spurred optimism within the federal government and private sectors. Yet, as of August 9, the Bureau of Labor Statistics reported that the number of job openings increased to 10.1 million on the last business day of June. Employment growth generally lags behind other economic indicators, setting the coming months a key measure of the nation’s comprehensive economic recovery.

THE JULY EMPLOYMENT SITUATION
Each month, the BLS releases the Employment Situation report, which provides calculated estimates of Americans employed and unemployed. In the July report, the unemployment rate decreased to 5.4%, a 0.5 percentage point drop from June, with 9.5 million people unemployed through the month. The leisure and hospitality segments continued to show notable job increases, with more than 380,000 jobs returning in the accommodation sector. Roughly 5.7 million fewer people are employed than before the pandemic. At the time this article was penned, federal pandemic unemployment programs were slated to expire in early September, even as more than half of the states, led by Republicans, opted out of federal benefits. President Biden and members of Congress in both parties have indicated they are unlikely to extend the enhanced federal unemployment benefits.

AMERICAN RESCUE PLAN PROGRAMS
As the leading group of hotel owners and operators nationwide, AAHOA Members are at the forefront of creating careers and investing into the communities they serve. Despite the uptick in summer travel, many members reported job vacancies and challenges rehiring during an online survey conducted by AAHOA to assess the employment situation in the hospitality industry. In the survey’s findings, 95% of respondents reported job vacancies at their hotels, yet 67% plan to increase their staff over the next three years when considering the impacts of COVID-19 on the workforce and business and leisure travel. As we continue down the road to recovery, AAHOA is firmly committed to work alongside lawmakers to address this developing challenge through community engagement and sound public policies. Below are two programs AAHOA encourages members to take advantage of.

EMPLOYEE RETENTION TAX CREDIT EXTENDED TO DEC. 31, 2021
The American Rescue Plan, passed in March, extended the Employee Retention Credit through the end of the year. This credit allows eligible employers of businesses impacted by the pandemic to claim a credit for paying qualified wages to employees. According to the Internal Revenue Service, eligible employers can claim up to $7,000 per employee for each quarter. The maximum credit is $28,000 for an employee for 2021.

TAX CREDITS AVAILABLE TO EMPLOYERS PROVIDING TIME OFF FOR COVID-19 VACCINATIONS
The ARP offers a tax credit for small and midsize employers to be reimbursed for providing paid time off for their employees to receive and recover from COVID-19 vaccinations. The most critical action hoteliers can take now is to encourage their staffs to get a vaccination if they have not already done so. Vaccinations are a great means to ensure the safety of your employees and the confidence of your guests.