Wage rises take some swallowing in hospo
Restaurateur James Beck has embraced the living wage at his Bistronomy eatery in Napier.
‘‘It felt like the right thing to do,’’ said Beck, who believed the hospitality industry ought to pay wages that made it a lifetime career option for people at the start of their working lives.
Most small businesses do pay more than the minimum wage, a survey of more than 650 owners of small businesses conducted by Stuff and Neighbourly found. Just 22 per cent said they had any employees on the minimum wage, which rose on April 1 to $16.50 an hour.
But the proportion of small firms with some staff on the minimum wage will rise as the Government has pledged to lift the minimum wage to $20 an hour in 2021.
Marisa Bidois, chief executive of the Restaurant Association, expected the rises to take place in a series of annual jumps, which would take some swallowing for many restaurant and cafe owners.
‘‘The profit margins are pretty thin in the industry,’’ Bidois said.
The minimum wage rises could leave living wage employers like Beck losing the value of being able say they pay better than their rivals, though he’s not too bothered.
‘‘We certainly wanted people to know, but it’s not increased our business,’’ Beck said, about committing to pay a living wage of at least $20.55 an hour.
‘‘If everyone is doing it, then I hope it means people will have more money to spend.’’ That in turn, he hoped, would see more business for enterprises like his own.
Absorbing rising costs has become the biggest concern identified by businesses. Survey respondents said the two biggest threats to their companies were: rising costs (34 per cent); and legislation/compliance (24 per cent).
Factors feeding into higher input costs for small businesses include petrol price rises, the weaker dollar, and the minimum wage.
Accountant Sue De Bievre from Beany expected the minimum wage rises to cause a ripple effect, lifting the wages of people currently being paid more than the minimum wage.
That was because higher-skilled, more efficient workers would expect their employers to maintain the gap between their pay and that of their lesser-skilled colleagues.
‘‘If you raise the minimum wage, you may also have to adjust everyone upwards to maintain pay differentials,’’ De Bievre said.
Businesses that struggle to pass on costs by raising prices would have to get more efficient, said Craig Hudson, Xero’s New Zealand country head.
‘‘Consumers are getting pretty tetchy about cost increases,’’ he said.
Stuff is the media partner for Small Business Month, supported by CAANZ.