The leisure and hospitality industry, which includes a high number of front-line workers vulnerable to COVID-19 exposure, was devastated by the onset of the pandemic. Between February 2020 and April 2020, the industry lost 8.2 million jobs, or 49 percent of its prepandemic total—significantly more than any other industry.20 But widespread vaccine distribution beginning in early 2021 sparked a sustained nationwide economic recovery, growing employment between January 2021 and September 2021 by 3.4 percent overall;21 in leisure and hospitality, employment grew by 16.8 percent, or 2.2 million jobs, in that time.22 However, job growth in leisure and hospitality has varied significantly across states, particularly when comparing by minimum wage and tipped minimum wage levels.
As shown in Figure 1, states with higher minimum wages have seen faster job growth in the leisure and hospitality industry since January 2021. States with a minimum wage of more than $12 an hour saw industrywide employment growth of 25 percent, compared with only 7 percent growth in states still using the federal minimum of $7.25. Although there was some variation from state to state, there is a clear trend that states with higher minimum wages have seen more job growth.
