1 in 7 US businesses raised wages last year because of the pandemic

• About one in seven businesses increased pay in 2021, according to a report from the Bureau of Labor Statistics.
• It's yet another indicator of a wage shortage, rather than a labor shortage, as workers demand more.

2021 was the year that workers said they needed to get paid more — and new data shows that businesses started listening.

The Bureau of Labor Statistics released data today on how private-sector businesses have made changes during or due to the pandemic based on surveys run from from July 27 through September 30, 2021.

According to the Bureau of Labor Statistics, 14.5% of private-sector businesses said they raised their base wages due to the pandemic. That's 1.2 million establishments that upped pay amidst the ever-tightening post-vaccine labor market.

The data spells out what's become increasingly clear: Workers — even with low rates of unionization and decades of declining wages — are doing their part to reshape the economy, pushing wages higher and making flexibility more permanent.

As has been seen in other wage data, raises have been especially common in historically low-paid sectors. Accommodation and food services led the way in increased base wages: 242,801 establishments or 34.3% of establishments in this industry did this. Around 20% of retail trade businesses increased their base wages, or 203,539 retail trade establishments.

The following chart shows what share of businesses in different industries raised base pay because of the pandemic:

Medium-sized businesses tended to be most likely to offer raises because of the pandemic. About a quarter of businesses with 20-49 employees increased their pay compared to under 10% of those with 1-4 employees.

Wages rising so rapidly shows yet again that workers are demanding more from work, and employers are beginning to listen. Over the last nine months, Americans have been quitting at near-record highs, especially in the lowest-paying industries. The latest data again suggests that reports of persistent labor shortages across industries like retail and food service are more of a wage shortage, with those low-wage sectors leading the way in raising pay after decades of stagnant wages.

In January, the most recent month that BLS released employment data for, wages soared even higher than economists were forecasting. Average hourly earnings across the economy reached $31.63, marking a 5.7% rise from the year before.

"The overarching story again is that wage growth is still strong as a result of the competition that employers are facing for workers," Daniel Zhao, a senior economist at Glassdoor, previously told Insider.

The report also shows what businesses paid bonuses to current or incoming employees, as well as extra pay given. According to BLS, 5.5% of establishments "temporarily paid a wage premium/extra hourly amount for working during the pandemic."

Additionally, 2.4% of establishments paid signing bonuses to new workers, 4.5% of businesses paid current workers a bonus for referring people to apply, and 9.4% of private-sector establishments paid "one-time special monetary awards/appreciation bonuses for working during the pandemic." Those numbers are far lower than businesses who opted to raise wages altogether, suggesting that a more permanent increase was better at attracting workers.

Workers still have a long way to go after decades of falling unionization rates and low wage growth. Some economists have cautioned against saying this is a major boon in worker power or wages, especially considering how much wages would've otherwise grown without the pandemic. There also still isn't a federal mechanism to create a salary floor under these changes — the minimum wage has been $7.25 since 2009.

But the data does suggest that employers saw a need to up pay in 2021, and it's a trend that so far has carried into the new year.