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Hospitality hit by increase in costs

While the recent minimum wage increase will be helpful for low-income earners, it’s likely to make things more difficult for local hospitality businesses.

The increase of $1.50 – which kicked in on April 1 – takes the minimum wage up to $22.70 per hour and reflects an increase of 38 per cent in the past five years.

Steve Laurence – owner of Almo’s Books and Cafe in Carterton – said the bookstore was unlikely to be affected, but the cafe was subject to the difficulties that come with increases in operational costs.

“Particularly on the cafe side of things, we’re seeing increases in costs of everything, and all the time,” he said.

“Most of those increases can’t be passed on to customers, because their income is also constrained.”

Laurence said that after nearly three years of disruption and covid-related reluctance for people to go out as much, everyone in the hospitality sector was now hurting.

“Turnover’s been down for years and costs are rising,” he said.

“It’s a difficult thing because, certainly, employees who are working on these lower wages have the same pressures as everyone else.”

Marvin Guerrero – owner of Masterton’s Don Luciano Cafe – agreed staff welfare was important, but said the minimum wage increases added extra pressures to running the business.

“I love my staff, but there needs to be more support for the hospitality industry if they keep increasing the minimum wage.”

Guerrero gets by through working on the shop floor and in the kitchen himself, but said business costs remain stubbornly high.

“There is a need to put more systems in place to help businesses through a recession,” he said.

Business Wairarapa General Manager Nicola Belsham said another minimum wage increase would be difficult for smaller, local businesses.

“Everything has increased in cost since 2020, and all consumers are aware of this,” she said.

Bella Cleary
Bella Cleary
Bella Cleary is a reporter at the Wairarapa Times-Age, originally hailing from Wellington. She is interested in social issues and writes about the local arts and culture scene.

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