Construction, Restaurant, and Retail Hiring
Employers Increase Wages and Bonuses
Remittances to South America Rise 90%
[Asia Economy Reporter Haeyoung Kwon] As the U.S. job market boom continues, the value of immigrants is soaring. Employers in construction, restaurants, and retail sectors struggling with labor shortages are raising wages and offering generous bonuses to retain immigrant workers. This trend contrasts sharply with recent layoffs in big tech companies. It reflects the persistently hot U.S. job market.
On the 7th (local time), the Wall Street Journal (WSJ) reported, citing U.S. Department of Labor data, that the hourly wage for construction workers has risen 15% since the end of 2019. Construction, along with restaurants and other services, is a sector where many immigrants who came to the U.S. primarily work.
The wage increase felt by on-site workers is much larger. Lenin Calix, from Ecuador, working at a construction site in Washington DC, said his daily wage jumped from $120 (about 150,000 KRW) before the COVID-19 pandemic to $200 (about 250,000 KRW) now. That is a 60% increase in three years. Hosue Morillo, an undocumented immigrant from Honduras assembling shelves at a Florida factory, earned $13 (about 16,000 KRW) per hour two years ago but now receives $18 (about 23,000 KRW). Freddy Moron, originally a chef from Venezuela, used to earn $150 (about 190,000 KRW) per day doing electrical and plumbing work at construction sites, but now makes $170 (about 210,000 KRW) daily doing painting work.
Meanwhile, employers are offering better conditions to retain workers. Luis Reyes, who runs a restaurant in Washington DC with mostly immigrant staff, significantly raised wages and gave bonuses last year. Before the pandemic, they only handed out meal vouchers before Christmas, but last year they gave bonuses ranging from $250 to $5,000 (about 310,000 to 6.3 million KRW). Large corporations are also joining the wage increase trend. Walmart plans to raise store employees’ hourly wages from $12?18 (about 15,000?23,000 KRW) to $14?19 (about 18,000?24,000 KRW) starting early next month, a 16.6% increase based on minimum wage standards.
As labor shortages and inflation improve immigrant workers’ conditions in the U.S., the amount they remit to their home countries is also increasing. According to the World Bank (WB), remittances from the U.S. to South America rose 9% year-on-year to $142 billion last year. With wages rising due to inflation last year, immigrants sent more dollars to their families back home.
The rising value of immigrants in the U.S. aligns with the recent robust job market. According to the January employment report recently released by the U.S. Department of Labor, nonfarm payrolls increased by 517,000, three times the market forecast. The unemployment rate was 3.4%, the lowest since May 1969, indicating a state of “full employment.” Although the Federal Reserve (Fed) has sharply raised interest rates amid recession concerns, the hot job market shows no signs of cooling. Labor shortages are especially severe among low-wage workers. According to the U.S. Department of Labor, about 10.46 million job postings in November last year failed to fill positions, with 8.4% of those in retail. As the U.S. job market boom continues, there are forecasts that the Fed’s pause in rate hikes may be delayed, prolonging uncertainty around monetary policy.
The WSJ pointed out, “Many economists expected the Fed’s rate hikes to increase unemployment and reduce demand in sectors like construction that rely heavily on immigrants. But now, the opposite situation of labor shortages is faced.” It added, “U.S. employers are paying premiums to hire immigrants in an excessively tight labor market.”
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