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Restaurant owners rally against a wage increase over 3%
A minimum wage increase of more than 3% would cripple businesses say restaurant bosses.
While a 3% increase is less than half the rate of inflation, the restaurant and catering sector says any rise in line with inflation would result in “major price hikes”, reduced operating hours and job losses.
Casual employees would be the hardest hit.
However, the mooted increase has been backed by most other employer groups.
The increase is part of government and union movement submissions to the Fair Work Commission’s annual wage review.
The ACTU in particular is seeking a $57 a week increase for minimum wage and award-reliant workers.
This would come into effect on July 1 and push the hourly rate up by $1.50 from $21.38 to $22.88.
This is the biggest dollar amount sought by unions at an annual wage review since 2018 when unions pursued a 7.2 per cent rise, equivalent to $53 a week.
If approved, the weekly national minimum wage would increase by $56.88 to $869.48 and annually by $2965 to $45,337.
The government has asked the Commission to ensure minimum wage does not go backwards, while keeping inflation in mind.
Restaurant owners fear cost blowouts with any major increase.
The Restaurant and Catering Industrial Association said: “Recent decisions by the Reserve Bank of Australia to increase the cash rate, the ongoing inflationary environment for energy costs and food inputs, along with workers’ compensation premiums and other business inputs have all contributed to an economic environment that reduces business confidence.”
The Association represents 57,000 restaurants, cafes, and catering businesses, all of whom wish to stay cost competitive, but are currently struggling to do so.
An Association report points to 45 per cent of businesses saying net profit had decreased, while 40 per cent of business owners are working 20 or more unpaid hours each week.
With penalty rates rising 6 per cent, many operators are choosing to stay closed on the weekends.
“Small businesses that are unable to afford any excessive increases in the modern award wages rates and the subsequent application of weekend or public holiday penalty rates, will discourage trading and reduce the number of available shifts for employees, resulting in further underemployment and unemployment,” the association stated.
It went on to say, “an unsustainable wage increase will jeopardise the recovery and viability of small businesses, which are already feeling the pinch from rising operational costs and reduced consumer spending”.
“As businesses struggle to remain price competitive, an unsustainable wage increase will result in major price hikes across the sector, with the cost burden carried by consumers.”
Jonathan Jackson, 16th May 2023
