How Common Is it for Oregonians to Build a Career in the Hospitality Sector?

by Damon Runberg

September 3, 2019

It is relatively rare for individuals in Oregon to build a long-term career in the hospitality sector. There were 178,719 individuals whose primary job back in 2005 was in accommodations. Using payroll tax records, these workers were tracked through time to see how their career unfolded and how their pay changed.

Of those 178,700 from 2005, around 63 percent remained employed in the broad hospitality sector just one year later. Most of those who left the industry completely dropped out of Oregon’s payroll records (18%). This means that they either dropped out of the labor force, became unemployed, or, most likely, moved out of the state. For those who continued to work in Oregon, but stopped working in accommodations, the largest shifts were to retail trade (6%), professional and business services (3%), and health care (2%). These are obvious transitions as accommodations employ a large share of janitorial workers who could find similar work for a janitorial service provider (professional and business services) or a hospital. The transition to retail trade is likely a reflection of young people moving around between low-skilled and entry-level jobs early in their career.
Less than half (48%) of the 2005 accommodation workers remained employed in the broad hospitality sector as their primary job just two years later (2007). As we continued to move through time, the share of these accommodation workers who remained employed in the broad hospitality sector diminished. By 2018, the share who were still working in the sector was down to only 17 percent. Although the move of hospitality workers out of the industry was relatively continuous, the rate at which these workers moved to another industry was fastest in the first two to three years. After that point the workforce became much more stable. The rapid churn for this cohort of workers in the first couple years after the reference year is not surprising since many of the jobs in this industry are entry-level, and folks move on from them quickly. However, the odds of building a long-term career in hospitality greatly increased for those who made it past the three-year barrier.

One of the main factors that led accommodation workers to move on to a different industry was likely pay. Those who transitioned out of accommodations didn’t see dramatically higher wages immediately. In fact, in some instances, median pay diminished in the short-term for those who moved to a different industry. However, wage growth in the long-run was stronger for those who transitioned to any other broad industry sector compared with those who continued to work in hospitality. Those who moved into construction and government saw the largest wage growth in the short-term. The largest wage gains in the long-run were seen by those who transitioned to information, government, financial activities, and education.

For those who worked in the accommodation sector for the past 13 years, median hourly wages averaged roughly $15.90 by 2018. That equates to just over $33,000 a year for a full-time and year-round worker. The wage for these experienced accommodation workers is 10 percent lower than the 2018 median hourly wage for all workers in Oregon ($17.79). However, compared with the median hourly wage for all workers in the leisure and hospitality sector the wage for these experienced accommodation workers is quite a bit higher, roughly $3 more an hour (+23%). Wage growth for the 2005 cohort of accommodation workers who stayed in the industry through 2018 was relatively strong and consistent with the exception of a few years around the depths of the recession. Although wages for these long-term hospitality workers remained relatively low, the levels of growth were quite strong when compared with wage gains across the broad economy.
Despite the low share of workers who stick with the industry in the long-run, the actual number of workers who remained employed in hospitality for more than 10 years was 37,000 people. Workers can and do make a career in the hospitality sector. Those who stuck with the industry were rewarded with strong wage gains. However, their wages remained lower than those who transitioned to higher paying industries.

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