It’s time for hospitality and tourism to pay up

The Guardian posted another whinge piece on how the hospitality and tourism industry is suffering from an acute shortage of migrant workers:

“It’s very dramatic, staff shortages that are really starting to bite now,” Daniel Gschwind, the chief executive of the Queensland Tourism Industry Council, said.

He said the sector had suffered from a lack of labour even before the pandemic, with cooks, chefs and hotel managers in short supply, although the Queensland industry brought more than 30,000 people back to work last year…

He said two years of international borders being closed had also cut off the flow of working holiday visa holders, international students and skilled visa holders on which the industry had relied.

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“People have all kinds of views about that but the reality is that the Australian economy was fuelled by thousands of international workers,” he said.

Has the hospitality & tourism industry ever stepped back and wondered why it struggles to attract staff? Because if it did, it might notice that it pays by far the lowest wages in the nation:

According to the ABS, the median pay across the Food & Accommodation industry was only $500 per week in 2021, little changed from 2015.

This is less than half the $1,200 median income of Australians:

In particular, cooks and chefs are notoriously poorly paid. According to the ABS, chef annual average earnings (AAE) were only $57,704 in 2018, whereas cooks earned a pitiful $40,596.40. This compares poorly against AAE of $67,012 for all occupations in 2018:

Both occupations are also ground zero for migrant wage theft and exploitation.

Instead of always reaching for cheap exploitable migrant workers, the hospitality & tourism industries should try to attract local workers by offering decent pay and conditions. Doing so would alleviate so-called labour shortages.

As long as the hospitality & tourism industries continue to offer crappy wages and conditions, labour shortages will remain. It is called a “labour market” for a reason – it too is subject to the laws of supply and demand.

Any industry that relies on cheap exploitable migrant labour to thrive is not a sustainable industry. It needs fundamental structural reform.

Unconventional Economist

Comments

  1. While its easy to point fingers at the industry, its likely also true that any business that didn’t reach out for cheap migrant workers would have struggled to stay in business. Food can’t be super expensive, but rental costs are so wage costs were the only thing keeping it all together.

    Also, there was practically 0 enforcement of the law. Finding cash on hand jobs would be like shooting fish in a barrel but they only did a few token busts. Over time the industry gets addicted to this, as do the landlords of the commercial properties.

    We’re just a broken country in the end.

    • All true enough, but Hospitality and Tourism is just an extension of the Budget, the Population Statement, and the IGR. Like Hospitality and Tourism, the Treasury GDP counts all the benefits of mass migration, and outsources all the costs.

      As long as LibLab conducts our 1950s populate-or-perish policy under strict Treasury Rules, any other forms of wage or tax “enforcement” over the endless migrant fodder will always be a complete waste of time, and designedly so.

      • Arthur Schopenhauer

        Surely it would be cheaper to develop a nuclear deterrent?

        At least it would be loyal to the country.

        • Why? I haven’t noticed any political party in the lower house acting in the interests of the electorate.

        • Totes BeWokeMEMBER

          It’s been well established the next wars will not require canon fodder.

          Fewer people, more resource wealth we can use for defence.

          • Totes BeWokeMEMBER

            Where?

            Everywhere you can see when your eyes are open.

            We’re going to be scrambling out of the trenches with 303’s are we?

          • Arthur Schopenhauer

            The US technology doctrine has lost every War since Vietnam.

            Where has it won? The Falklands? Kuwait? Can’t think of any others.

          • Totes BeWokeMEMBER

            If it wasn’t for the America, you’d be writing in another language, and you certainly wouldn’t be writing about politics.

            Can’t wait to get nearer to the election. You watch what LNP do to Labor re China and America.

            I put Labor at about 100/1 of winning majority government in May.

            Leftists do my head in. You have destroyed the Labor party, and our country, and beyond remarkably, you still don’t understand what you’ve done.

          • Totes BeWokeMEMBER

            What language?

            Just vote Greens and Labor, and you’ll soon find out.

            “What war did the Americans win to save the world?”

            All of them, or you’d be speaking a different language.

            Not sure how you measure who wins a war, but I reckon that’s a start.

          • The US technology doctrine has lost every War since Vietnam

            Who is Saddam Hussein troubling nowadays?

          • The US technology doctrine has lost every War since Vietnam.

            Not that I’m defending Totes’ usual descent into fallacies, but on this, it’s questionable whether they’ve been seriously trying to “win” them.

    • ….can’t be super expensive, but rental costs are so wage costs were the only thing keeping it all together.

      Rental costs are high, so (low) wage costs are keeping it together….

      You know if these were reversed….

      “Wage costs are high, so low rental costs are the only thing keeping it together….”…. there may be issues of envy…. but this would actually still work.

  2. Totes BeWokeMEMBER

    Need to bring in foreigners and pay very low wages so we can bring in lots of tourists to provide jobs for Australians working in tourism.

    It’s all BS.

    Let the least efficient businesses drown and or put downward pressure on the other costs of the scammers in real estate, utilities, government charges.

    Phroneo has it right…”We’re just a broken country in the end”

    We need a reset or our offspring are doomed. Heading to American wages, medical and welfare, working poverty, inequality.

  3. Totes BeWokeMEMBER

    Australians are working out we’re in trouble.

    Just don’t look here for answers.

    …”Twelve members of Rudd’s 2013 cabinet are still on Labor’s frontbench, nine years after that chaotic final year of Labor in office….Anthony Albanese, who was deputy prime minister under Rudd, still has Chris Bowen, Richard Marles, Mark Dreyfus, Tanya Plibersek, Bill Shorten, Brendan O’Connor, Tony Burke, Penny Wong, Mark Butler, Julie Collins and Catherine King around his table”.

    lolol.

      • Totes BeWokeMEMBER

        They’re all elites with payment for a job very well done pending in post politics employment in cream jobs.

        They are the cream of Australia’s scum. Putting themselves on a woke pedestal that’s at the core of our problems.

        Far worse than any of the other more transparent scammers in business and politics.

        Labor are the epitome of deceit.

    • Totes BeWokeMEMBER

      Bill Shorten (except his parental visa) would be the best out of that sorry bunch.

      What did they do?

      Used the same polls that told them they were a $1.02 winning chance to conclude Shorten was the problem, so they shafted him.

      This party needs terminating next election.

    • TBW, you are on fire. Your paymasters at the IPA will be sending a big bonus.

      False equivalence and no alternatives is easy.

      • Totes BeWokeMEMBER

        Labor are not forming majority government.

        Australia despises them even more than LNP, for all the reasons I discuss that are all the polar opposite to what the IPA stand for.

        It’s time you started emotionally preparing yourself.

        Vote for nationalism.

      • I know that is meant to be an insult, but at least the IPA do intellectual work of a high standard and represent their members fearlessly, as opposed to those in Parliament.

  4. Display NameMEMBER

    It might be that some enterprises do not have a business if they pay real wages and jack prices. I suspect that might affect good parts of the gig economy. No great loss, it is almost all discretionary expenditure. Some people may have to get new jobs, real jobs instead of being subsidised by cheap migrant labour.

  5. The NAB CEO is bemoaning having to skill up 2,000 staff to do cloud computing. He also says we have a shortage of skilled and unskilled. But I guess he would say that being the largest business lender.

  6. Mrs Deplorable was looking through Stalkbook the other day for jobs in hospitality or Retail. Almost all had wages advertised below award rates and one had $10-$28 per hour (I would assume $10 is more likely than $28).

  7. Fishing72MEMBER

    Had the niece and her fiancé here yesterday.

    He’s a GM of a hotel ( 80 rooms I think ) and said they can’t get workers and their laundry supply can’t get workers. He’s just lifted rates and started two night minimum stay to cover the lack of housekeeping/ laundry. He said he’s got all Aussie workforce and heaps of crew Taki the piss with the covid iso so they can grab a bit of summer good times…such a surprise in the dedicated career orientated world of hospitality !

    I asked why he doesn’t get the niece working there and she said the pay is no good so she works elsewhere in retail. He looked a bit sheepish about that. Jacking the rates , offering a lesser service but not offering any higher wages and complaining about staff availability…..lol.

  8. Instead of always reaching for cheap exploitable migrant workers, the hospitality & tourism industries should try to attract local workers by offering decent pay and conditions. Doing so would alleviate so-called labour shortages.
    Agreed this whole charade has to stop.
    There is a real and persistent shortage of very skilled labour in Australia yet our solution is to flood the labour market with unskilled workers and students, it is nothing short of stupidity.
    Thing is, it’s not new, Why do we let successive governments get away with what is clearly just population ponzi?
    We let the ALP get away with it, just as we LNP get away with it, which suggests that either we’re stupid or that this practice serves some other goal…..and what could that possibly be? (houses earn more than people, maybe?)

    I’ve had very talented engineers refuse to move to Australia because they recognized that it was (and I quote)
    Nice place to visit, but I wouldn’t want to live there!

    How long will we remain a “nice place to visit”, if no one with any globally valued talent wants to live here?
    Everyday we see some high tech Aussie developed company decide they need to relocate to the US (or Asia) and we just accept this as inevitable, bit like the sun raising and setting. But where is our moments thought for what this trend tell us about our own future?
    Sorry I’m banging on about this again, I just learned that another high tech Aussie company (spin off of Sydney uni) was US bound (relocating to Austin)

    • If you want a bigger market one might need to relocate. Why have a factory or base here when you can place your factory/base inside a bigger market like USA, EU, or China, or India, or Thailand, etc.

      If you are a kid studying at school would you invest in a career (like STEM) that is open to replacement via immigration or offshoring?

      The only industry left is Mass Urbanisation here (and much of the global economy). So the kid can only be inspired to be a tradesperson or something funded by the Government.

      We were abandoned by the Major Parties loooooooooooong ago……

      • If you are a kid studying at school would you invest in a career (like STEM) that is open to replacement via immigration or offshoring?
        That’s rather defeatist talk. As an industry STEM has always been about out-competing anyone and everyone.
        If you don’t like the heat, than stay out of the kitchen!
        If you want to continue adding value in STEM then you rise above the competition. you fight for that position at the front of the pack, you make yourself invaluable. How you achieve this is through specialization and the self development of capabilities that are simply not widely known (at the moment)
        Sorry to shatter your view of a STEP utopia but this is the way it has been for at least the last 40 years and not just in Australia, it’s a global game!

        • If you want to continue adding value in STEM then you rise above the competition

          Australians compete?

          Where do we learn this?

          All our companies are oligarchies, virtually all duopolies, and it takes legislation to keep the banks at 4.

          Our culture is now softcocks giving out medals for participation, because active participation in competition is racist or sexist. We have all our institutes hobbling our best with false grievances of racism or sexism, and handing out positions base don quotas…. the opposite of learning how to compete.

          When our flagships do tend to attempt to compete.. our banks in the 00’s, Bunnings in UK hardware haldf a decade ago, they get their arses handed to them on a plate.

          The only area we are competing… are male run niche industries….. when diversity hires haven’t penetrated.

          So again, where do we learn to compete?

          First step is identifying a problem, the second step is identifying the cause of the problem.

          • I don’t have a problem with sexual preference, race, religion or gender diversity.
            there are really interesting STEM companies developing in Australia that were formed by Pakistani, Algerian and Afghan immigrants (Abyss Solutions comes to mind)
            https://abysssolutions.co/about-us/
            Looks to me like they tick a lot of your problematic “diversity” boxes, however they look to me like a small company with huge potential. A company we should nurture (but that’s unlikely given our attitudes)

          • Atlassian another obvious example as one of those Australian companies people like to put up as competing on the global stage.

          • don’t have a problem with sexual preference, race, religion or gender diversity.

            Very few people do, more so when it isn’t an issue, and people are working in accordance with merit.

            But diversity for diversity’s sake, where people are placed for quotas, in place of merit, becomes a toxic cultural problem.

            there are really interesting STEM companies developing in Australia that were formed by Pakistani, Algerian and Afghan immigrants (Abyss Solutions comes to mind)
            https://abysssolutions.co/about-us/
            Looks to me like they tick a lot of your problematic “diversity” boxes, however they look to me like a small company with huge potential. A company we should nurture (but that’s unlikely given our attitudes)

            It also looks like a ‘company that started with 4 scientists from the university of Sydney’ started as a company with a very strict core mission, without the overhead of non-productive HR fat.

            If you need me to be clear, i’m talking about the HR departments of our oligarchs, rather than startups, who clearly don’t have the cash flow margins to pay for this (or be extorted into having) this.

            Yes, the company you describe is what we should be nurturing… they look like they are competing well, despite the headwinds

          • Atlassian another obvious example as one of those Australian companies people like to put up as competing on the global stage.

            Yes, it’s obvious because they’re such a rare occurence in Australia.

            It’s not as if Timber Tower is the 35th building of its kind built on Broadway.

    • Jumping jack flash

      THiS!!

      But they need to be that high so we can be eligible for the debt we all need to afford the standard of living we all want.

      Perversely, the standard of living is a construct of our own creation. There’s no reason it can’t be cheaper, but you know, the banks are privately owned debt factories and they need to be able to sell their debt to earn their money.

    • Fact check: False

      Wage share has fallen from 62% in 1978, to around 53% in 2019.
      Profit share has risen from around 24% in 1978 to around 37% in 2019.

      https://www.rba.gov.au/publications/bulletin/2019/mar/pdf/the-labour-and-capital-shares-of-income-in-australia.pdf

      Extrapolate that out to nominal figures.
      GDP 1978 – $118.3 billion
      GDP 2019 – $1.397 trillion

      Return to labour
      1978 – $73.3 billion
      2019 – $740.4 billion
      An increase of 900%

      Return to capital
      1978 – $28.4 billion
      2019 – $516.9 billion
      An increase of 1721%

      Imagine looking at your inputs, once had an increase of 900%, the other had an increase of 1721%… then pointing at the 900% and saying “this is the problem”

      What this points to is Australians over 2 generations have increasingly found it more difficult to afford the products they are making… which is the opposite of “an increased standard of living”

      No, it’s not “wages are way too high for most economic activity”

      Return to capital is way too high for most economic activity in Australia.

      Wage earners are your customers.. less wages, they can then afford to buy less product, which in turns reduces the demand for jobs.

      Profit share is the number one drag on the economy. Add in housing prices, which is the number one variable for the stickiness for the prices of wages.

      Workers are not going to accept a wage where they can’t even afford shelter.

      • interesting analysis. Apart from mining we’ve had to rely on the A$ to make us competitive to export most other items which has always suggested to me our wage structure is high. Certainly in many other countries low skilled labour is poorly paid.

  9. arescarti42MEMBER

    Caught up with an old friend over new year – he’s been a chef for 12 years. Very talented and enjoys what he does, but has decided to leave the industry because the pay is terrible, and employers treat you like garbage.

    Hospo businesses deserve to burn.

  10. Wage inflation anecdote: Spoke to a friend who is a bar manager last week. Good salaried job for a 40 hour per week gig….. however, she is just coming off a 72 hour week, and is routinely expected to work 50-60 hours per week without overtime, time in-lieu, or any other benefits. All due to lack of casuals and part time staff. Is writing a demand for pay increase or will go elsewhere. She has three offers already. Good staff are known in the business and pursued when in short supply. The venues that want to stay open to keep he pokies running (that’s all they really care about in NSW) will have to pay up or shut down without immigration.

  11. reusachtigeMEMBER

    Get stuffed! I ain’t paying more for my daily restaurant meals or my regular dirty weekend’s away!! We should be working out ways to lower people’s pay to make business more profitable not increase it.

  12. I reckon you hit the nail on the head. Most well to do don’t care about the population ponzi because it offers them subsidised food and entertainment. Well screw them. Let the $45 main course plate become $80 and they can then contribute more tax (GST) because they pretty sure aren’t paying their fair share of income tax.

    • I certainly get what you’re saying. But the flip side of this is that we end up doubling the price for everyone.
      I’ have no idea how many days of my working life were spent “on-the-road” but at one stage it was definitely upward of 150 days per year.
      That’s 150 nights spent in a hotel, at least 300 meals eaten out every year. Doubling my travel costs would definitely have an impact on my personal bottom-line.
      Unfortunately there are plenty of people like me in today’s workforce, it’s a hard way to make a living, so I’m not excited when others find ways to make my work even harder.

      • Jumping jack flash

        “That’s 150 nights spent in a hotel, at least 300 meals eaten out every year. Doubling my travel costs would definitely have an impact on my personal bottom-line.”

        Of course, but had our leaders had any idea they would have targeted those recent stimulus payments at people like you so you could pay the increased prices, those prices are turned into wages, (and then more debt and more demand and more prices and wages, and around it goes)

        The US gets it.

    • Jumping jack flash

      Exactly!

      The inflation (wages and prices) we have experienced over the past 15 years is completely out of whack with the amount of debt that has been magicked into existence over the same period, and our inflation is dangerously low to keep our choice of economic system running. It was only made possible by the routine cutting of interest rates to create additional debt capacity.

      Since 2007 we implemented a strategy of inflation suppression primarily using cheap labour as a result of the fear that rising interest rates would would destroy the entire debt-soaked economy, even though the RBA has effectively decoupled interest rates from inflation as far back as 2010, or whenever it was that Capt. Glenn took over and introduced the “sustained period” – it was one of the first things he did, but it largely went unnoticed by our glorious policy-makers because by that time we had imbeciles in charge, businesses were hooked on cheap labour to steal wages, and the idea of keeping prices low was certainly a noble one.

      The fact is that to support the next leg of debt-fueled economic growth, while we still depend on debt spending to create and maintain demand for services and imported items, [and interest rates have bottomed out], we need wage inflation and that can only be created by price inflation. It simply cannot come from anywhere else because we don’t do anything else. There is no magic extra money, and businesses generally don’t borrow money to pay for extra positions and wage increases.

      There is government stimulus of course, but that comes at a macroeconomic cost, and our leaders completely bungled our one and only chance at “free” stimulus to kickstart the inflation we desperately need.

      • I am actually looking forward to the next 12 months. I think we have finally come to a head where if wages don’t rise then our one and only industry (building and trading houses) will falter – but hey I have been wrong for the last 12 years and prices last year blew me out of the water. But anyhow, I would love to see how a low wage earner on $50000 a year is going to pay sufficient rent on a ramshackle house now worth over a million dollars..
        To be honest I think COVID has provided our system/politicians with breathing space. I would now love to see 400,000 skilled immigrants come into the country and do all those highly skilled jobs like fruit picking, washing dishes, clearing tables, flushing Gyprock and driving courier vans for which no locals can be trained or are able to do.

  13. DA – the system needs to find its own equilibrium. An earlier comment mentioned owners need to pay lower wages because rents were so high. I have seen examples of exorbitant city rents for cafes and such. If high wages result in less viable enterprises then this will most likely result in less demand/occupation of these commercial premises ultimately resulting in lower rents which can then accommodate higher wages etc.
    The point is it’s the exploitative wealthy that keeping demanding and angling for lower wages. Fuck them. It’s a class war.
    BTW, I was always a staunch LNP supporter but no more. My position now is that everyone deserves a decent wage and decent housing. I don’t want to live in a city where the rich live in gated enclaves being surrounded by the unwashed poor.

    • Jumping jack flash

      “My position now is that everyone deserves a decent wage and decent housing.”

      Very noble.
      The government has absolutely no control over this though, and nor do they want to.

      While we consider ourselves a “free market economy” complete with private banks, and, for all intents and purposes, an independent central bank. With glorious leaders who know very little about banking – or about anything they’ve been tasked to oversee for that matter, its total open slather, and we get exactly what we have received for the past 10 years.

      • Totes BeWokeMEMBER

        A country with everything to lose, was always going to be the biggest loser in the “free market economy”.

        I don’t know a single person that thought this was a good idea.

        We had everything. Now we’re going to lose the whole lot, literally.

        • We had everything. Now we’re going to lose the whole lot, literally.
          And for young Aussies that’s the best news I’ve heard in a long time…
          Let it burn

          • Totes BeWokeMEMBER

            Nothing good is unfolding.

            Immigration will continue, wages will continue falling, housing will remain tight and expensive, infrastructure will never keep up, all opportunity will be given away to new comers, and not so far away, our offspring will be living horrendous lives as serfs earning minimum global wage in globally owned Australia.

            Today’s elites, including todays politicians, will be filthy rich and living in secure and gated communities.

            Let it burn, IMO, should only refer to LNP, Labor, Greens, regulators, big business, elites and immigration. Otherwise it’s a slow burn for the plebs that have done nothing to deserve (other than being stupid) what our government (and opposition) have done to them.

            This is a crisis unfolding. There is still fading hope.

            Leave the 3 majors last below the line, in whatever order you can stomach, is what I’ve been saying for over a decade.

            Let LNP, Labor and Greens burn (and demand new politicians hold them to account) and save our kids.

          • I will probably get flamed for this but…
            The rest of the world already has a way of ranking just how valued (or otherwise) Australian labour is. This de-facto ranking happens through the success (or otherwise) of our human capital oriented businesses on the global stage.
            The closest proxy measure that we have for this is the Economic Complexity Index.
            Australia has fallen from 50th to somewhere around 90th over the last 30 years.
            50th position wasn’t ever respectable but it was understandable, 90th position is a joke.
            We are globally ranked among failed despot states, true island banana republics and war torn African nations.
            That’s the most accurate measure available for the global value of Australian labour..
            Our self image places us in the top 10 or maybe 15 nations of the world. We’d like to believe that we’ve earned a place at the G8 summit even though we accept that this is not really the case.

            Basically we’re self ranking Australia as a top 10 nation in the world, whereas the world is ranking us (by the exportable product of our labour) to be bumbling along in the bottom quartile (and falling)
            There’s no Political / Economic tweak or slight change in direction that will address this problem and get us back on track.
            This fire has to be lit, has to be allowed to burn and has to burn hot. If we’re lucky something good will rise from the ashes.

          • Totes BeWokeMEMBER

            I’ll have to get back to this.

            Turk Warrior is the first bet I’ve had since Coolangatta won. Hobart R6. $1.45 in ten minutes.

  14. Simple solution, empower the union Hospo Voice with resources to encourage membership, support for both employees and employers, monitor wage/award compliance and robustly present case for employees when new award conditions are being negotiated.

    However, this would not happen because unions and support for local/OS employees is zero in Australia under LNP govt. following imported US Kochonomics? Does not say much about equality in, quality of ideas and sovereignty in Australia?