While Hilton Head Island employers say they are facing a crisis-level shortage of hospitality workers, the pay they’re offering workers is not even keeping up with inflation.
Average weekly pay in food service and accommodations, for example, increased from $329 in 2005 to $394 in 2015 in Beaufort County, according to the U.S. Bureau of Labor Statistics. The increase was more than canceled out by inflation. When adjusted to today’s dollars, average weekly pay in the industry dipped from $406 in 2005 to $401 last year.
The sluggish pay rate — paired with an increasing number of jobs in Bluffton where workers can afford housing — is exacerbating the island’s workforce crisis.
Increasingly, island workers, including bartender Bob Wilson, are taking jobs closer to home. Wilson worked nearly 20 years on Hilton Head Island, including 10 years at Old Fort Pub in Hilton Head Plantation. But in 2014 he took a job at the upscale The Bluffton Room restaurant in Bluffton’s Promenade.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
He now makes more than he did as a bartender on the island in tips after moving to a higher end restaurant, has more affordable housing options and is able to ride his electric bicycle to work, which is about a mile from his home.
“People back on Hilton Head are making basically the same that I was 10 years ago,” Wilson said. “And these are people with experience.”
Even when raises are given on the island, the extra money doesn’t go as far as it once did, said Brian Small, a line cook at Catch 22, a Hilton Head seafood restaurant. Small earns $13 per hour today vs. $9 per hour he earned about 10 years ago when he started in food service on the island.
“Every year the regime fees in my neighborhood go up and up. Stuff gets more expensive,” Small said.
Some island employers concede that the pay raises they’ve given out in recent years isn’t enough to attract and retain an adequate number of workers. In addition to competing with a growing number of jobs in neighboring Bluffton, they’re up against the fact that Hilton Head has the highest cost of living index of any metropolitan area in South Carolina, according to data compiled by the S.C. Department of Commerce.
For skilled kitchen employees, for example, wages have risen several dollars over the last few years at eateries owned by SERG Restaurant Group, the island’s largest employer, according to its owner Steve Carb.
But it hasn’t been enough to fill the jobs, Carb said.
Lee Edwards, owner of The Greenery landscaping on Hilton Head Island, which employs about 600 people, said the company pays 10 to 15 percent more an hour to its Hilton Head workers compared to its Bluffton workers. The company also raised its starting wage for Hilton Head workers by $1.65 this year.
“You’re not going to find anybody to take a job paying last year’s rate,” he said.
Edwards said he knows it’s difficult for workers to afford life on the island, even with recent increases in wages. But raising rates more aggressively to attract workers is often not feasible and would drive up costs to customers, he said.
Labor costs are the company’s biggest expense, representing about 33 to 36 percent of expenses. Significant increases would cancel out profits and might drive away customers, Edwards said.
When wages increase at restaurants, owners have to raise prices, said Jimmy Soules, who owns three Bluffton restaurants that are attracting former Hilton Head employees.
“Everybody wants pay to be higher. But the only way you’re ever going to get that done in the restaurant business is making prices higher,” Soules said. “Every increase in salary is hard.”
Lingering effects of the recession are also playing a significant role in stagnant wages in Beaufort County, said John Salazar, director of the University of South Carolina Beaufort’s Lowcountry and Resort Islands Tourism Institute.
The local tourism economy is still recovering, which is likely creating the lag in wages, Salazar said.
Other factors may also be holding pay down, including the use of stopgap labor sources, said Scott Smith, a professor in the Hotel, Restaurant & Tourism Management Department at the University of South Carolina in Columbia.
Two visa programs, for example, bring about 700 foreign workers to the island every year. The programs help employers fill open positions without having to significantly raise wages, Smith said. The H-2B visa program allows companies to hire experienced hospitality workers from other countries while the J-1 program connects international students with island jobs.
“Employers are going to do whatever they can to be profitable and raising wages just a dollar, (their) costs go way up,” Smith said.
It’s likely to take a more dramatic shortage of hospitality workers before wages significantly increase.
“When they have no other way to get the labor, that’s when they realize, ‘We have to raise wages. We can’t hold back.’”
Reporter Rebecca Lurye contributed to this report.