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A ‘living wage’ will cost jobs

4 September 2013

A ‘living wage’ will cost jobs

The introduction of a ‘living wage’ will cost jobs in the motel sector, with some owner-operators indicating they do not have the capacity to pay more in wages, and would instead lay off staff.

The idea of a living wage – put by some at $18.40 per hour - has been supported by some politicians in both local and central government.

While it’s all well and good for politicians to talk about raising wages, but thought needs to be given to the businesses that end-up footing the bill, MANZ Chief Executive Michael Baines says.

“It’s a simple equation, raising the minimum wage to the so-called ‘living wage’ level of $18.40 will cost jobs. That is a fact,” Mr Baines says.

“Motels are being hit on one side with sharply increasing costs, often in the form of rating and compliance costs that are forever being cranked higher by greedy local government. On the other side we are facing competition from the likes of B&Bs and holiday homes which are untaxed, unregulated and can dodge these compliance costs.”

The majority of motels are owner-operated, so when costs increase but revenue does not, usually the only option is for the owner to lay off staff and do more of the work themselves. This is what will happen under the living-wage scenario.

“If politicians wanted small business owners such as in the motel sector to have the capacity to raise wages then they should cut the red tape, reduce compliance costs and create an even playing field across accommodation providers,” Mr Baines says.

“If you create an environment where quality businesses can flourish, especially small businesses, then the rewards will flow for everyone.”

About MANZ
The Motel Association of New Zealand is the representative body for the motel industry, with 900 plus members throughout the country. MANZ works to promote the interests of motels and the wider tourism sector, and to constantly improve the services offered by motels. By staying in a MANZ motel guests, are assured of a high standard of accommodation, hospitality and service.

www.nzmotels.co.nz

ENDS

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