Great news: lack of foreign workers drives up hospitality wages

The sharp contraction of temporary migrants is driving up hospitality wages, according to Restaurant and Catering Australia (RCA). But rather than let the ‘market’ balance supply & demand, the RCA is calling for the federal government to hasten access to cheap, exploitable migrant workers:

Pubs, bars and restaurants are offering workers their pick of shifts and roles and hourly rates in some cases over $40, costs a key industry body said would have to be passed on to patrons.

Wes Lambert, chief executive of Restaurant and Catering Australia, said some hospitality businesses were paying sign-on and retention bonuses “into the thousands of dollars”.

“Some businesses are offering up to $45 an hour for positions that would normally pay in the 20s,” he said…

Restaurant and Catering Australia has called on Immigration Minister Alex Hawke to hasten the arrival of working holiday and skilled visa holders and international students to plug the critical shortage.

The notion of bringing foreign workers into Australia to work in hospitality to alleviate purported ‘skills shortages’ is deplorable. The actual evidence shows that the Accommodation & Food Services industry (i.e. hospitality & tourism) pays the lowest wages in Australia at only $650 per week, according to the ABS:

Hospitality industry median earnings

The Accommodation & Food Services industry pays the lowest wages in Australia.

It is true that the Accommodation & Food Services industry has been hit hard by the reduction in temporary foreign workers:

 

Temporary visa holders

These temporary visa holders tend to work in low skilled industries like hospitality and compete for jobs directly with young Australians:

Temporary migrants

In addition to placing upward pressure on wages, the sharp reduction in temporary foreign workers has driven youth unemployment well below pre-pandemic levels (despite the recent lockdowns):

Therefore, the drop in foreign workers has boosted opportunities for young Australians – an unambiguously good outcome for the nation.

We should also remember that the hospitality industry is notorious for migrant wage theft and exploitation. Thus, giving the industry easier access to foreign workers will only worsen the systemic exploitation already prevalent across hospitality, keeping wages low and denying local workers employment opportunities and a living wage.

The long-term solution to ‘labour shortages’ is to offer decent wages and conditions. That’s how a labour ‘market’ is supposed to work.

Politicians must stop pandering to vested interests like RCA.

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments

    • Strange EconomicsMEMBER

      This means 25% higher restaurant prices to pay living wages as wages are a big chunk of costs. And now locals are getting a decent wage for a while.
      This is a major impact to the high wealth class out at expensive restaurants entertaining again now after freedom day..
      Clearly something must be done to get low wage workers back.

  1. ErmingtonPlumbingMEMBER

    Great news?

    What about me lunchtime $10 steak and chips up the pub!?

    If they raise the price to 15 or 20 bucks I’m gunna have to rethink this whole bolshie leaning of mine.
    Schooners are already way to expensive!

  2. In Alex Hawke speak: “Skilled migrant baristas are essential, to boost local jobs and create new hospitality businesses. Australia must scour the world, to catch up on the many thousands of vibrant hospitality workers it might be losing to Canada.”

  3. Tassie TomMEMBER

    Who could have known???

    The “Labour Market” – in which potential workers bid each other down in competition for a job, AND potential employers bid each other UP in competition for the worker? Isn’t this the core Liberal philosophy that WorkChoices was based on, and which the Liberal party was willing to lose an election over?

  4. So F&B wages have now risen to the point where young people can now just afford to couch surf in Sydney?