Inflation bites into hospitality wages as businesses struggle
Wages can’t rise as quickly as inflation, which means more pain for the hospitality industry and its workers.
While data suggests Australian wages are rising, they are not rising quickly enough to meet cost of living pressures.
That’s no fault of employers, who are struggling not only to retrain good staff with pay rises, but also keep up with the rising cost of goods.
Sydney restaurant owner Joe Natale said of the issues he now faces, "We've had to cap our bookings, we've had to eliminate takeaway. We've had to accommodate our business according to the staffing that we've got on.”
Natale can’t put on more staff, nor can he afford to pay some employee asking prices and is now weighing up whether to close one of his four venues in the Cronulla area
"The number that people are throwing at the moment is $100,000. And … it's ridiculous," Natale told the ABC.
Natale has 90 staff on the books with some on more than $90,000. Despite that, he found himself washing dishes after a kitchen hand walked out with a better offer of $55 an hour plus penalty rates.
"It was just getting to a point where I was constantly getting asked on a weekly basis for more money, people coming in, people walking out, people getting poached by other operators," he said.
The Australian Bureau of Statistics (ABS) releases its new wage price index or WPI data this month. It will show wages are rising.
"The wage price index has risen 2.6 per cent over the past year," ANZ senior economist Catherine Birch said..
"But if we look at average earnings per hour, that's risen by a much stronger 5 per cent over the past year. And that's more relevant for households because it's what workers are actually being paid."
In the current climate, people are switching jobs at the highest rates since 2013, as they seek better pay.
The problem is now common throughout the hospitality industry and restaurants, café owners and pubs are now offering large incentives to attract or retain staff.
That means restaurant owners like Natale could run their business at a loss.
Natale is. He is struggling to find staff and his chefs are working overtime.
"I'm not the only one in this predicament. This is across the board," he told the ABC.
"A main [meal] that costs around $30 should realistically be priced around $55, but with interest rate hikes and competition that's not possible.
"Because I'm at a point where there are days I don't enjoy, I don't love coming to work. Because I'm having to confront the staff shortages, the predicament of increases of prices.
"It's not sustainable. I don't know how long we're going to keep it going for."
Jonathan Jackson - 01-11-22
