Fast-food restaurant wages rose 10% in last quarter, biggest jump in years, report says

You’ve seen the headlines about salary increases at McDonald’s, Chipotle, and other restaurants, now it’s showing up in the data.

Salaries for hourly workers at limited-service restaurants rose 10% in the second quarter from a year ago, according to a new report from industry tracker Black Box Intelligence and Snagajob.

It’s the biggest quarterly jump in years. By comparison, hourly limited-service workers saw their wages increase just 4.1% in the first quarter from a year earlier.

Many industries are struggling to find enough volunteer workers as demand rebounds, but restaurants in particular have been hit hard by workforce issues. The July unemployment rate was 8.4% for restaurants and drinking places, up from 5.9% two years ago, according to the Bureau of Labor Statistics. Data from the Black Box showed that full-service restaurants operate with 6.2 fewer employees in the kitchens and 2.8 fewer in the front of the house than in 2019.

Last year’s layoffs and time off have soured some restaurant workers in the industry, while others are staying home due to lack of access to child care or related health issues. to the current pandemic. A Snagajob survey of 4,700 former and current hourly workers found that 18% of the unemployed had to quit their jobs to care for family members.

Turnover rates are also higher than pre-pandemic levels, according to the report, putting even more pressure on restaurants. The limited service turnover rate was 144% in June, up from 135% in 2019. The full-service restaurant turnover rate was 106%, up from 102% before the health crisis. Snagajob’s survey found that 28% of workers left the restaurant industry entirely to seek higher wages in other jobs, such as warehouses.

“We have all these employees and all of a sudden they’re gone,” Starr Restaurants CEO Stephen Starr said on CNBC’s “Squawk Box” Wednesday. “They don’t want to come back.

This dynamic has forced many restaurants to increase their salaries, offer bonuses and improve their services. McDonald’s raised salaries for employees at company-owned restaurants by an average of 10% in May and urged franchisees, who operate 95% of its establishments in the United States, to follow its lead. He also said he would pilot an emergency child care service. Chipotle Mexican Grill increased their hourly wages to an average of $ 15 and launched referral bonuses.

Fast food workers aren’t the only ones seeing higher wages. The report also says line cooks for full-service restaurants were paid 6% more in the second quarter, nearly 3% more than their pay rise in the previous quarter.