Labour crisis: Don't be in business if you can't pay decent wages, AUT hospo expert says

Anybody saying cheap wages will solve the hospitality staff shortage should think again, a hotel workers' union says.

And an AUT academic says some hospo businesses are facing the consequences of a decades-long dependence on low wages and non-union labour.

Low unemployment, rising living costs, a shortage of new migrants and border reopenings have coalesced to place pressure on retail, health, aviation, food processing and tourism.

"It's much more complex than people are making it out to be," Dr David Williamson from AUT University told the Herald.

Williamson, from the university's School of Hospitality, Tourism & Events, said even in pre-pandemic boom times, many hotels and restaurants had trouble finding staff.

He said fair pay agreements would lead to improved wages and working conditions, and subsequently make the industry more attractive to jobseekers.

"Good employers look after their staff really well and pay them really well and they don't have a problem."

He said an hourly wage of $25 for entry-level hospitality staff seemed fair, and for experienced staff it should be higher.

Unite Union, seen here in a previous action about fast food jobs, says the days of minimum-wage hotel work are long gone, and not coming back. Photo / Nick Reed

The current minimum wage is $21.20 and Living Wage Movement Aotearoa's living wage effective from September 1 is $23.65.

"The sector as a whole is reaping the rewards of being dependent on cheap migrant labour for way too long," Williamson added.

"If your business cannot generate enough profit to pay decent wages to its staff, then you shouldn't be in business. That is a question for our country as a whole."

He said decent pay was important for hospo workers, and it was irrelevant if an employee happened to be an 18-year-old living at home with their parents.

What mattered, he said, was whether or not somebody could do the job.

Unite union's hotel organiser Shanna Reeder said the industry had been low-paid and workers were undervalued for a long time.

She said pressures on the industry existed even before Covid-19, and then a wave of redundancies struck hotels when borders shut and lockdowns were activated.

"Half of them get made redundant and now they want them to go back."

Hospitality NZ has said the sector frequently offered flexible working options and it was unfair to pillory the industry for paying low wages.

But Reeder said that was an inaccurate characterisation.

"Most workers that I know and that I speak to need a certain amount of hours to pay the bills.

"This idea that people can get by on a shift here or there is not accurate."

Reeder said progress had been made for hotel staff though.

"The days of it being a minimum wage job is over. We're not going back to those days."

She said no Unite hotel worker members were on less than the living wage anymore.

"All of our hotel workers are on at least part-time, permanent part-time, decent hours, multiple shifts. It has improved, I have to say since MIQ, and we have been working on that."

Reeder said a typical entry-level hourly wage now was $22.75 and in some places $25.

"Most of the majors have just accepted that that's life," she said of big employers.

A hospitality worker shortage in places including Queenstown has inspired warnings about damage to the multi-billion dollar tourism sector. Photo / Getty Images

Some hoteliers such as Paul Hutton, Hilton's head of Australasia, have already said higher wages would be needed to bring people back into the industry.

In May he said higher pay would add cost to the bottom line, but hotels were recovering financially.

The Hotel Council Aotearoa last week said a worker scarcity was compromising the quality of service some hotels could provide.

It has said more foreign workers would help ameliorate the shortage of entry-level workers.

But the Government's relatively new accredited employer work visa scheme has been a source of some friction.

The Hotel Council said the scheme's $25 minimum hourly wage requirement for specific tourism and hospitality jobs was sometimes unrealistic.

The labour crisis and related work visa problems have spilled over into other sectors.

Auckland barbershop Eden Barbers shut this week after 20 years in business, citing a lack of foreign workers and immigration red tape.

Earlier this week National Party MP Erica Stanford said skilled migrants were not being welcomed promptly - and the country urgently needed another 4000 nurses.

And on Tuesday, ANZ New Zealand chief executive Antonia Watson urged the Government to make immigration settings more flexible to help businesses struggling with staff shortages.

And seafood exporter Sealord has said a massive worker shortage would cause a $5 million loss at the Nelson wet fish processing factory this hoki season.