Destinations

Charlotte’s Economy Recovers One Low-Wage Hospitality Job at a Time

Sep 14, 2013 1:00 pm

Skift Take

Charlotte’s growing reputation as a popular tourist destination is pulling it out of the recession, but some worry that mid-level jobs are being replaced with cheap labor — a fear that hotels claim is unsubstantiated given the opportunity for growth.

— Samantha Shankman

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Business is good these days at the Hilton Charlotte Executive Park. Room bookings are up at the south Charlotte hotel, and so is hiring.

“It’s definitely a growing industry,” said guest services manager Nicole Handel, an ex-New Yorker hired eight months ago. “I don’t see it going down. It’s just going to keep multiplying.”

Charlotte employment statistics suggest she’s got a point.

While hiring remains slow in many sectors this Labor Day, Charlotte’s leisure and hospitality industry has added more jobs in the past year than any other part of the local economy.

Hotel and restaurant officials say their businesses are pumping much-needed jobs and tax revenue into an economy that badly needs help recovering from the recession.

But economists worry that it also means Charlotte is replacing middle-income jobs lost during the recession with low-wage work in the hospitality sector.

They fear it signals a national shift in which workers who once supported families with blue-collar jobs face a new economy dominated by minimum-wage jobs or high-skill ones beyond their reach. “Charlotte’s not alone in that,” said Mark Vitner, an economist at Wells Fargo. “A disproportionate share of the jobs added across the country have been in low-wage occupations.”

Last week, demonstrators in Charlotte joined others across the country in picketing outside fast-food restaurants, demanding $15 per hour pay for workers.

As picketers marched outside a south Charlotte Taco Bell, one of the organizers accused billion-dollar fast-food chains of exploiting workers desperate for jobs at a time when high unemployment leaves few options.

He expressed indignation after several passing motorists yelled insults at the protesters.

“What we want is in the benefit of all Americans,” said Luis Rodriguez, a community organizer with the advocacy group Action NC. “It baffles me that people would stand in the way of this.”

The leisure and hospitality sector has added 8,100 jobs in the past year in the Charlotte metropolitan area, an 8.3 percent gain. Professional and business services followed with 5,700 jobs, a gain of 4 percent. The construction sector, deemed key to an economic recovery, added 1,500, a 3.8 percent gain.

The hospitality industry is also leading the way at the state level. About 438,900 North Carolinians work in leisure and hospitality services. Despite slight recession-era losses, this sector has bounced back faster than any other in the state, adding 21,500 jobs over the last year and about 44,900 since the end of the recession. It accounts for about 11 percent of total nonfarm employment.

Experts say the sector’s growth can be credited mostly to the fact that its employees don’t cost very much to hire. Jobs in leisure and hospitality services generally offer low wages, shallow benefits and part-time work. According to the Bureau of Labor Statistics, the average American in the sector earned $13.48 an hour working 25.9 hours a week in July.

In Mecklenburg, fast-food preparation and serving workers make an average of $8.68 per hour, according to federal data compiled by the N.C. Department of Commerce.

Waiters and waitresses make $9.70 an hour, while maids and housekeeping cleaners make $8.85. The federal minimum wage is $7.25.

Hospitality officials say their industry includes more than just low-paying positions. They say entry-level jobs give any housekeeper or waitress a chance to learn the business and advance into better-paying management posts.

“I’d like to see more high-paying jobs here, too,” said Mohammad Jenatian, head of the Greater Charlotte Hospitality and Tourism Alliance. “But I don’t like the idea of anybody downgrading the jobs in the hospitality industry. We have to appreciate any industry that’s creating jobs right now.”

Tourism’s impact

The leisure sector stayed afloat during the recession partly because of the resiliency of the state’s tourism industry. In 2012, tourism was responsible for $4.4 billion toward the state’s payrolls, and supported 193,610 new jobs for North Carolina residents, according to the Commerce Department’s Division of Tourism. Last year, tourism pumped $6.4 billion into the restaurant industry, $3.4 billion into lodging and $1.9 billion towards recreation.

Mecklenburg hotel occupancy tax collections rose 14 percent, to $40 million, in the 2013 budget year, while food and beverage tax collections rose 6 percent, to about $24 million.

Broader shifts in the economy also help explain the industry’s post-recession hiring strength relative to other sectors.

Technological advances are allowing companies to do more with less, said John Connaughton, an economist at UNC Charlotte.

Manufacturers hit by the recession, for instance, closed their most inefficient plants and relied on better technology to get by with fewer people.

Now, Connaughton said, they’re not of a mind to rehire the folks they laid off from inefficient plants. That means fewer high-paying blue-collar jobs.

The hospitality industry, however, isn’t prone to that kind of downsizing.

“We still clean a motel room the same way we did 50 years ago,” Connaughton said. “And there’s somebody at the desk 24-7.”

Pay ‘flat-lined’

Debbie Walley, 53, feels trapped in her low-wage restaurant job.

She said she has made decent wages while working at upscale restaurants in the past, but when she began working in the fast food industry her pay “flat-lined,” she said.

A shift manager at a Charlotte fast-food restaurant, she said she makes $12.50 an hour.

She said two of her adult children live with her so they can share the cost of her $675-per-month apartment off West Boulevard.

She turned out with the protesters last week.

“They’re hard-working people,” Walley said of fast-food crew members. “Too many of them are on public assistance.”

The unpredictability of the work schedule makes it hard for people to plan household budgets, she said, and hard for them to find the time or money to go back to school.

“We have some people that work nine hours one week and 30 hours the next,” Walley said.

‘Stepping stones’

Industry officials say it’s overly simplistic to see their jobs as just housekeeping and waitressing positions. Those positions offer a chance of advancement to many others.

“Those are stepping stones,” said Vinay Patel, present of Sree Hotels, which owns the Hilton Charlotte Executive Park and about a dozen other area hotels. “We’ve got folks who work for us who started out at the front desk and they’ve moved up in the management.”

At the Hilton Executive Park one recent afternoon, two of the more recent hires were Handel, the guest services manager, and Laura Hartsoe, the executive meeting manager. Hartsoe was hired in November to help handle the hotel’s growing business travel clientele.

Handel, 41, said she started in the hotel industry out of college, working the front desk as an intern. She enjoys her current role, which requires her to make sure guests are happy.

The hospitality industry “is not cut out for everyone,” she said. “It’s not as glamorous as some might think. You have your ups and downs, like anything. But overall it’s a fun job.”

The (Raleigh) News & Observer contributed.

(c)2013 The Charlotte Observer (Charlotte, N.C.). Distributed by MCT Information Services.

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