Compression in the Wage Distribution During the Post-Covid-19 Labor Market

The COVID-19 pandemic caused changes for business across all industries, though the effects were unequal. As lockdown restrictions aimed at mitigating the spread of COVID-19 were relaxed, nominal wage growth rose sharply in leisure and hospitality and in trade and transportation, the two industries with the highest concentration of low-wage workers. In fact, wage growth was most pronounced for workers in the bottom 50 percent of the wage distribution who changed jobs into one of these industries.