LAUSR

Abstract The purpose of this study is to examine whether base employee earnings in the leisure and hospitality industry are competitive compared to other sectors of the economy. To these ends, we analyzed the extent to which changes in base employee earnings in the leisure and hospitality industry are economically and industrially driven in the United States. The results show that employees in these industries have the lowest earnings in the U.S. economy. Additionally, the results indicate that (1) base employee earnings in the leisure and hospitality industry and its subsectors are mainly driven by economic factors and (2) base employee earnings have not grown in accordance with overall earnings. Specifically, a one-dollar increase in overall earnings leads to only an eighty-one-cent increase for leisure and hospitality workers, suggesting that the industry is at a disadvantage in the contemporary labor market. The theoretical and managerial implications of these findings are discussed.