Five Measures of Real Average Hourly Earnings in Accommodation & Food Services

Still likely rising. We’re awaiting October CPI numbers, and October wages for accommodation and food services, but using nowcasts and extrapolations, we can show what real wages look like through October.

Figure 1: Average hourly earnings of production and nonsupervisory workers in accommodation and food services, in $/hour, deflated by CPI (black), chained CPI, seasonally adjusted (teal), personal consumption expenditure deflator (red), CPI-wage earners and clerical (sky blue), and Harmonized Index of Consumer Prices, seasonally adjusted (pink), into 2020$. NBER defined recession dates shaded gray. Chained CPI and HICP seasonally adjusted by X-12/X-11 ARIMA. October observation on wages extrapolated from leisure and hospitality services average wage over 2021, using log first differences specification. Source: BLS, BEA, EU, NBER, and author’s calculations.

29 thoughts on “Five Measures of Real Average Hourly Earnings in Accommodation & Food Services

  1. pgl

    All measures put this real wage near $15/hour. Of course rsm is going to whine about confidence errors – it is all he knows how to write even if he has no idea what he is talking about.

    And of course the world best business man (Sammy) is going to complain about alleged wage floors and his inability to attract workers at the minimum wage as he is too cheap to pay market wages.

  2. pgl

    Since I have suggested the low pay for truck drivers is one reason people think there is a shortage of these drivers, Kevin Drum’s title “There is no shortage of truck drivers” got my attention:

    Kevin does not really end up saying that the truck driver market is in full equilibrium but he does not a point I have made – the real compensation for truck drivers has eroded over time. Now we do not have wage ceilings so a fair question which Kevin raises is why has the market not driven up truck driver compensation?

    1. pgl

      Kevin closed with:

      “Trucking companies could attract them back with higher wages, but that’s considered beyond the pale. As with so many employers, they’ll whine and complain and claim to be willing to do anything—except pay more. It’s an old story.”

      Sammy’s kind of employers!

      1. baffling

        my understanding is there are far more people with a cdl than are actually working in the field. there is not a shortage of truck drivers. there is a shortage of truck drivers willing to work for the current wages. but many employers do not hold truckers up to high esteem, and treat them accordingly. the trucker lifestyle flourished when labor unions had strength. that time has passed.

        1. Macroduck

          There is apparently a pretty steep slope in pay and treatment for newly hired truck drivers. Employers are often willing to pay long-time drivers well, but the new guys rarely get to spend time at home, are only paid for time behind the wheel, and are paid at a rate that means they don’t really have any money left after expenses.

          This might be a great system (for employers) during normal times, but it creates a barrier to bringing new drivers in when they are in seriously short supply.

    2. paddy kivlin

      i spoke with an east coast trucker who works a ‘regular run’, as an employee, for a large company.

      he observed that some truckers were laid off during the shut down in 2020, many dept of trans cdl a certifications were lapsed, due to no sponsor for the laid off, examiners were non essential, etc. his opinion there remain a backlog of un-recertified that “want to work” truckers waiting to test. certifiers over worker/over tasked.

      owner- drivers likely have similar issues with dept of trans certs.

      1. Moses Herzog

        There was a headline of a shortage of semi-truck drivers in one of the major papers today, so he coincidentally was correct. Frankly as someone who used to work that job, truckers are salt of the Earth type people who I 100% respect. But a large ratio of them are dumb as a door nail. They aren’t always the best people to ask about what is going on in their own industry. And asking them about where their industry stands is like attempting to ask a baby turtle why so few of them make it to the ocean. You know, good luck with that. Most of them don’t read much and the ones that do are reading garbage like the Epoch Times, the Washington Examiner, or trucking companies spoon-feeding them from publications they find while they are a captive audience sitting at a truckstop. Because I love those guys and respect them that’s a hard thing for me to say, but it so happens to be reality.

        1. paddy kivlin


          i have known this fellow for years we get together rarely to camp and hike. not ‘dumb as a nail’. i camped and hiked 12 miles total with him that weekend.

          his random survey is limited and i know that but it makes some sense.

          1. Moses Herzog

            I didn’t mean anything personal to your friend. Some semi-drivers are sharp (I’m egotistical enough to think I was one of them, but I never shared with other drivers I had my Bachelor’s, because all it gained me was resentment). It has literally been years sense I was a driver. He may very well be aware of something I am not. As I said, in some rare and small windows of time, you could have a “shortage” or what the industry labels a “shortage” of drivers, and a shortage of certifiers on the CDL at the same time. In the current context I would not find that hard to believe at all. But I would also argue it is not “the norm”. And your friend I don’t think is saying it’s “the norm”. He’s probably largely right, depending on what his personal definition of “shortage” is. My definition of a driver shortage is different than most people’s because I consider driver wages to be artificially low.

      2. baffling

        well if you were to hear it from npr, who has no skin in the trucker game,
        apparently we have plenty of cdl drivers. it is just the working conditions suck. truck companies do not pay enough to keep them on the job. i made this point in a previous post. there is not a shortage of truckers. there is a shortage of truckers willing to work for current wages and job conditions. certification issues is a boogey-man argument.

        1. Moses Herzog

          It’s possible you could have a backlog immediately coming out of a recession. So it is conceivable you could kind of have both of these conditions (drivers not willing to work for the low pay, not enough certifiers). But that would only happen in a relatively short window of time like what we have right now. Generally, 95% of the time, I think your version of events is accurate. But I am biased as a former driver. I drove for a relatively short time frame, but still longer than the average driver. When I was starting out as a driver, the average driver didn’t last 6 months. Trucking companies will tell you it’s social isolation and strain on families. This is only part of the problem, and a segment of the problem which could be solved if companies cared to make the effort. Certainly the larger companies could solve it. Certainly smaller owner operators are going to have a harder time mixing-matching resources.

    1. paddy kivlin

      misinformation is a ‘scientific’ term for stop looking at data that is contrary.

      pfizere ceo may be worried the unsafety data that is coming……

      usa ‘all cause deaths’ (cdc excess deaths reporting) has never returned to pre pandemic in fact since august is higher than same months in 2020.

      what is different?

      1. baffling

        “pfizere ceo may be worried the unsafety data that is coming……”
        so to be clear paddy, you are more concerned about some future data that may or may not exist than the existing data. very scientific. lets just make up hypothetical data from the future as a reason to make decisions, rather than the data in hand today. brilliant.

        look paddy, in a previous post i gave you several links related to data, today, regarding items like mortality with/without vaccines and incidence of myocarditis with/without vaccines. this data was a complete contradiction of your arguments. in fact, the numbers you cited were shown to be false. it appears to me you have no standing whatsoever to discuss what is scientific or not, based upon the validity of your arguments so far. you are the definition of misinformation, paddy.

  3. Moses Herzog

    Menzie, you’ve made a semi-egregious error here. You forgot the orange coloring to mark the orange abomination’s squatting on White House property.

  4. ltr

    November 9, 2021

    The Biggest Kink in America’s Supply Chain: Not Enough Truckers
    Long hours and uncomfortable working conditions are leading to a shortage of truck drivers, which has compounded shipping delays in the United States.
    By Madeleine Ngo and Ana Swanson

    WASHINGTON — Facing more than $50,000 in student debt, Michael Gary dropped out of college and took a truck driving job in 2012. It paid the bills, he said, and he could reduce his expenses if he lived mostly out of a truck.

    But over the years, the job strained his relationships. He was away from home for weeks at a time and could not prioritize his health: It took more than three years to schedule an optometry appointment, which he kept canceling because of his irregular work hours. He quit on Oct. 6.

    “I had no personal life outside of driving a truck,” said Mr. Gary, 58, a resident of Vancouver, Wash. “I finally had enough.”

    Truck drivers have been in short supply for years, but a wave of retirements combined with those simply quitting for less stressful jobs is exacerbating the supply chain crisis in the United States, leading to empty store shelves, panicked holiday shoppers and congestion at ports. Warehouses around the country are overflowing with products, and delivery times have stretched to months from days or weeks for many goods.

    A report released last month by the American Trucking Associations estimated that the industry is short 80,000 drivers, a record number, and one the association said could double by 2030 as more retire….

    1. rjs

      imports of consumer goods were 15% higher in the first quarter of this year than the prior peak in the 3rd quarter of 2019, and up 33.4% from the nadir….those are goods that already made it thru the ports, not counting ships offshore….speculative financial assets can increase by a third in a year; physical transportation systems and the personal to run them, no so easily…

      another issue we’ve had is the types of things people have been buying….it takes a lot more delivery trucks when everyone is stocking up on a year’s supplies of toilet paper than when they’re all buying cell phones, even though the cell phones generate much greater nominal sales volume…

  5. ltr

    November 9, 2021

    Hot Tip for New York Times: Real Average Hourly Wages for Truckers are Down Five Percent Since 1990, Might Affect Driver Shortage

    We know that it is hard for trucking companies to get good help when it comes to their managers, but New York Times reporters might be expected to be a bit more on the ball. In an article * on supply chain problems, the NYT completely accepts the industry line that there is a huge shortage of truckers. Furthermore, it tells us that it would get worse over the decade.

    According to new developments in economic theory, it is believed that workers respond to incentives. It turns out that pay for truckers has fallen by more than five percent over the last three decades, according to the Bureau of Labor Statistics.

    Based on this theory, it is possible that the reason we don’t have enough truckers is that the industry is not willing to pay high enough wages. Furthermore, if we are looking out over a decade, they would have plenty of opportunity over this period to attract more truckers by raising wages.

    The article should have investigated why trucking companies are not raising wages enough to attract the needed amount of drivers rather than repeating transparent self-serving nonsense from company managers.


    1. ltr

      Surprisingly to me, earnings of transportation and warehousing workers having long fallen behind earnings of private workers still are not catching up:

      January 4, 2018

      Average Hourly Earnings of Production and Nonsupervisory Private and Transportation & Warehousing Employees, 2017-2021

    2. pgl

      “Real Average Hourly Wages for Truckers are Down Five Percent Since 1990”

      This is an important point but your FRED link shows that over the 1980 to 1990 period real wages had fallen by even more.

  6. Moses Herzog

    Seems from my view of things this story is not getting the media attention that it would seem to call for. It strikes me as a pretty big story:

    How long did it take before we found out Nixon’s connection to the Watergate “plumbers”?? Months?? Over a year?? There’s A LOT of things in this story we still haven’t heard about yet.

  7. rsm

    How do you think they get those figures? Does everyone write down their wage, and government statisticians get all the data because they observe the entire population?

    Or are they doing surveys, which have a standard error which you refuse to report, along with refusal rate and other measurement errors?


    《The establishment survey
    employment series has a smaller margin of error on the measurement of month-to-
    month change than the household survey because of its much larger sample size. An
    over-the-month employment change of about 100,000 is statistically significant in
    the establishment survey, while the threshold for a statistically significant change
    in the household survey is about 500,000.》

    《Total nonfarm payroll employment rose by 531,000 in October》

    Noise, right?

    1. pgl

      Gee rsm – they note in the title it is a survey. And I sent you a detailed description they wrote noting things like standard errors. Of course you did not read it – too busy writing your usual stupid chirping.

    2. Barkley Rosser


      Obviously when they are not just throwing darts at a wall, they are sitting in glass enclosed palace in Davos, Switzerland, making them up while George Soros looks over their shoulders laughing and paying them off. Is that what you wanted to say?

  8. ltr

    November 10, 2021

    China’s CPI, PPI growth picks up pace amid rising costs

    BEIJING — China’s consumer price index (CPI), a main gauge of inflation, rose 1.5 percent year on year in October, data from the National Bureau of Statistics (NBS) showed Wednesday.

    The figure was higher than the 0.7 percent year-on-year growth recorded in September.

    Specifically, non-food prices rose 2.4 percent from a year earlier, contributing about 1.97 percentage points to the CPI growth, said senior NBS statistician Dong Lijuan.

    Food prices dropped 2.4 percent, with the price of pork, a staple meat in China, slumping 44 percent. However, the price of fresh vegetables, which declined 2.5 percent in September, saw a 15.9 percent increase last month, said Dong.

    The NBS attributed October’s CPI increase to unusual weather conditions, rising costs and supply-demand imbalance in some products.

    On a monthly basis, CPI increased 0.7 percent. Food prices increased 1.7 percent, while non-food prices rose 0.4 percent.

    The country has set its consumer inflation target at approximately 3 percent for the year 2021, according to this year’s government work report.

    On the industrial side, China’s factory prices continued to pick up last month due to global factors and a strained domestic supply of key energy and raw materials.

    The country’s producer price index (PPI), which measures costs for goods at the factory gate, went up 13.5 percent year on year in October….

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