Consumers will bear the cost of increase in minimum wage

The Government increase in the minimum wage by 50 cents will result in price increases across the board for hospitality products, ranging from your favourite tipple to your weekend away, says Adam Cunningham, President of Hospitality New Zealand.

With most hospitality businesses reporting surpluses of less than 5%, 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. Mr Cunningham suggested that 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 long suffering New Zealand consumer that will bear the cost of Government’s intervention in the labour market, concluded Mr Cunningham.