Wairarapa hospitality businesses are calling out the Government over minimum wage increases, saying it is out of touch and warning they’ll be forced to pass the cost onto customers.
Multiple owners told the Times-Age the pay hike was a blunt tool to address the cost of living crisis and would only mean more pain in the pocket for patrons.
Greytown’s White Swan Country Hotel Owner Nick Rogers said the wage increase would not only affect minimum wage earners.
“It ripples upwards. They all have to go up relatively.”
Rogers, who has 94 employees across three hospitality establishments, said a permanent youth wage should be considered.
“I have 26 on the minimum wage that will be going up, but 22 of them are under 22.
“We will have some people that are 16 or 17 years old on $22.70 an hour. That is an incredible wage.”
He said the Government was disconnected from small to medium business owners and the pressure they were under.
“We now have 10 days of sick leave, an extra public holiday, and a tight labour market.
“They do this, and prices will go up – and so will inflation. We have to increase the price, we have no choice.”
Almo Books and Cafe owner Steve Laurence, meanwhile, was in two minds about the announced increase.
“We know there are lots of people on low incomes who are really struggling and need more money,” he said.
“But there are also a lot of small businesses that aren’t in a position to pay it.”
The margins in hospitality were small, Laurence pointed out, and because wages formed a significantly higher portion of expenses, adjusting pricing was a certainty.
“We’ll need to look at prices and staffing. Essentially we need to do the same with fewer people, and I don’t know how.
“It’s an extraordinarily inefficient way to increase incomes for low-income families. It’s a wealth transfer from businesses to the Government.”
Grant Jefferson, co-owner of Martinborough’s Village Cafe and Bar, also anticipated a price rise come April 1, and noted operating a small business in New Zealand was incredibly difficult.
“We purchased this place in July 2020 when we came back from the Middle East.
“We thought New Zealand would be business-friendly, but that’s not the case.”
He said the border reopening had relieved some pressure on the labour market, but it was still a “hellish” visa process, and the minimum wage increase will have a domino effect beyond New Zealand’s shores.
“This country relies on immigrant workers, but you have to pay them well above what a New Zealander would get. This will also push up the cost of foreign workers into the country – it’s all intertwined.
“We’re definitely concerned about it, it’s a real struggle.”
Jefferson said there would be a tipping point, but for now, he was hopeful they could keep operating.
“I just wish the Government was more supportive. I have been a Labour supporter all my life, and now I’m reconsidering.”
