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The government’s proposal to raise the minimum wage by 50cents to $13.50 an hour is being met with mixed reaction in the Tauranga hospitality sector.
From April 1, the minimum wage will rise from $13 to $13.50 per hour, giving people who work fulltime on minimum wage an extra $20 a week – or about $1000 a year.
Tauranga hospitality sector leaders suspect the increase to the minimum wage is unlikely to push the price of coffee up.
The government announced the rise on Wednesday saying this amount strikes the best balance between protecting low-paid workers and ensuring that jobs are not lost during these tough economic times.
The training and new entrants’ minimum wages will increase from $10.40 to $10.80, or 80 per cent of the adult minimum wage.
Bay of Plenty Restaurant Association president Andrew Targett says with between 30 to 50 per cent of employees in the hospitality sector on minimum wage, the increase will impact largely on the payroll of businesses.
“In the restaurant sector we do employ a number of people on the minimum wage from dishwashers to trainee chefs, so 50cents will impact on payroll of those businesses.”
However, Andrew doubts the 50cent rise will result in an increase in the price of food and beverages.
“If it went straight up to $15 then it would push the price up, but a 50cent increase will not have too much affect on prices.”
Andrew thinks the government is on the right track by starting with a small increase in minimum wage.
“If things are done gradually it won’t impact hugely. If it was a complete jump it would push everyone’s wages up, and impact hugely on everything.”
“A little is in the way to the right direction - at least it is not standing still.”
Tauranga Motel Association president Lloyd Stone says moteliers do not have a choice in the increase and will therefore have to bear the cost.
“It’s a requirement now, there is not much we can do about it.
“Each motel owner will have to work it out for themselves and then decide.”
Lloyd, who owns the Bethlehem Motor Lodge, says he will not be putting accommodation prices up.
“I simply will not be putting my prices up.
“The ladies that work here are part time anyway and do a good job and are well worth it, and we already pay more than the minimum wage.”
President of Hospitality New Zealand Adam Cunningham says the 50cent wage increase will result in price increases across the board for hospitality products, ranging from a glass of wine to a weekend away.
“With most hospitality businesses reporting surpluses of less than five per cent, hospitality operators have no choice but to pass on these costs as there is no fat left in the system.
“The minimum wage increase doesn’t just affect those on the minimum wage, but puts an upward pressure on all wage costs.”
Adam suggests in the current economic environment leaving the minimum wage as it is might have done more for the economy and more for providing access to jobs for school leavers.
“The industry just hopes that the public will be sympathetic to prices increasing as sadly again it is the consumer that will bear the cost.”
Opposition parties and unions have slammed the 50cent wage increase saying it is not enough.
NZ First leader Winston Peters says the increase is an “an insulting pittance”.
He thinks the minimum wage should be at least $15 an hour and says this increase will not even cover power price rises let alone the rise in the cost of food items.
