FAYETTEVILLE, Ark. (KNWA/KFTA) — A National Employment Report done by the ADP Research Institute is finding Arkansas wages rose 7% in the last year.

University of Arkansas economist Mervin Jebaraj said lower-income jobs in industries such as hospitality, restaurants, and beauticians are seeing the largest increase in pay. He said the reason is that those industries lost the most workers during the pandemic, and their labor shortages haven’t been resolved since.

“As a result, there’s a lot of competition for jobs. What happens is that wages have to go up for businesses to be able to compete for the fewer workers that are available,” said Jebaraj.

Although, Jebaraj said the pay for most workers is not keeping up with the 6.5% rise in costs from last year, which he said is impacting their ability to buy groceries and gas.

“Their ability to pay rent, pay for food, and pay for gas or pay for car repairs, any of those things. All of those things affect their ability to keep and hold on to a job as well,” said Jebaraj.

The Northwest Arkansas Council said the small jump in those workers’ wages is forcing them to live outside of cities where housing is cheaper.

“Folks just had been priced out and, I mean, they’re your teachers. They’re your firefighters and police officers,” said Duke Mclarty, with the NWA Council.

Inflation is currently slowing, and Jebaraj does expect pay to keep rising. But, that may take time that some Arkansans can’t afford.