Retail, restaurant wages continue to rise while job market cools

Wages are rising, but the post-pandemic job boom has ended, according to a new data indicator from commerce solutions provider Square.

The new Square Payroll Index uses data from Square’s labor management and payroll processing solution to provide the latest information about wage growth in the retail and restaurant industries. The index is designed to allow business owners, policymakers and media to track wages and earnings trends nationally and at the metropolitan level.

According to the Square Payroll Index, the median food and drink worker earned $13.64 per hour in base wages in September, totaling $17.44 including tips and overtime. The median retail worker earned $15.80 per hour in base wages, which increased to $16.31 including tips and overtime. 

Average hourly earnings are outpacing base wages as well as inflation. According to the Square Payroll Index, growth in average hourly earnings has fallen below the 2019 average (5.2% vs. 6.5% in 2019). While base wages continue to grow at a higher rate (4.6% vs. 4.0% in 2019), that growth has cooled in recent months and continues to slow. 

“Retail and restaurant workers, as well as the businesses who employ them, are part of the bedrock of the American economy,” said Saumil Mehta, Square’s head of point of sale and omnichannel. “We know that hiring and retaining good staff is a persistent challenge for our sellers. By tapping into Square Payroll data to report on wage growth in these key sectors, we can help our sellers continue to build strong teams and also add a valuable new metric to the public conversation.”

This September marks the twelfth consecutive month in which Square Payroll data showed growth in average hourly earnings outpacing inflation, last reported at 3.7% for August of 2023. Square’s data sample included more than 200,000 employees. 

“The Square Payroll Index shows that, while hourly wages continue to slowly rise, the post-pandemic job market boom is over,” said Ara Kharazian, Square’s research and data lead. “According to our data, growth in average hourly earnings has fallen since its peak in early 2022 and is now below the 2019 average. Despite the end of this boom, our research shows that the job market is strong, and wage growth has outpaced inflation for the twelfth consecutive month.”