Critics of the UI theory of labor supply argue: why is leisure and hospitality growing fast if UI constraint matters given the low wage jobs there? The simple answer is "thats where job cuts are biggest", but I think there is a longer answer to that which is useful...
Hold demand constant, and assume you have three industries: manufacturing, restaurants, and warehouses. Manuf has avg wage of $15, warehouses $12, and restaurants $10...
Now imagine you randomly separate workers from firms, with 1% in manufacturing, 5% in warehouses, and 40% in restaurants. Demand is unchanged. Then you reduce labor supply by paying people a fixed $ amount to not work.
Yes, this will bind most for workers in restaurants, so you might think they regain workers slowest. However, consider the labor demand curve slopes downward. So the more workers you lost initially, the farther up the demand curve you ride.
In other words, a small firm to the minimum number of workers needed to open is huge. The marginal value declines from there. So it could be the case that restaurants now value marginal hires much higher than warehouses value them, even though pre-pandemic wages were lower there
This is because we are farther up the demand curve for restaurants. So what would you see in this case? Rising pay in restaurants, and fast growth there, along with high openings, and weaker growth in the sectors restaurants are pulling workers from.
Anyway this is the same story as "they lost more jobs so they should grow faster", but an explanation for why pay is going up there quickly while job growth is weak in other sectors. They are pulling marginal workers from there. Also consistent with elevated quits
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