What does a minimum wage really mean to low income earners in Hospitality?

Stephen Hickmore:  On 1st July each year we welcome the Government gazette publishing of minimum wages for the hospitality industry. A timely bit of warmth and cheer during our winter? The increase is calculated using the simple equation of CPI (consumer price Index) plus 1.5%. With inflation at a scary 6.4% our minimum wage is adjusted upwards by a whopping 7.9%.Time to push the boat out and buy the family that new flat screen TV?. But, before low wage earners rejoice and sign the hire purchase papers, this modifies the minimum to a paltry R18.25 per hour.

Time to push the boat out and buy the family that new flat screen TV?. But, before low wage earners rejoice and sign the hire purchase papers, this modifies the minimum to a paltry R18.25 per hour.

It doesn’t take a degree in economics to compute. A high proportion of our industry team-mates will in real terms, after inflation, be taking home an extra 26c per hour. That is eight chappies a day or an egg. An extra loaf of bread a week or a bar of soap. Or perhaps our colleagues can celebrate at month end with a couple of Big macs or one and a half café lattes from Starbucks?

 

Let’s delve further and analyse the average monthly expenses of a waiter, junior chef or sculler working in hospitality. If one lumps together the basic living expenses of rent, transport, water and electricity at R2,580. Schooling and clothing at R580. Food, telephone and other expences at R1,050. Before a Sunday braai is cooked or movie tickets bought R4,210.00 per month is already accounted for. Our hard- working team member is R710 short at month end.

Our hard- working team member is R710 short at month end.

I hear the argument “well, there’s a choice. Either work here or get another job” But, with a 27% unemployment rate, does one really think our fellow South Africans have an alternative?

 

Our businesses may be going through tough times. Shareholders and Board members are squeezing for more profit, more cost savings. Certainly, one needs to look at the hard business facts to survive in an uncertain economy. Though, may I argue, there is a difference between pressing the last cent out of the lowest paid workers and ordering less paper, turning off the office lights at night and making the executive fly economy instead of business class? Do we reasonably consider the people who are at the coal face of our hotels, restaurants and entertainment facilities? The same individuals who smile and serve our customers every day, cook the food and clean the kitchens. The very same co-workers who make our businesses operate, without whom we would have to close shop. Those very same team-mates who can barely afford to survive on the minimum wage our industry sets out.

there is a difference between pressing the last cent out of the lowest paid workers and ordering less paper, turning off the office lights at night and making the executive fly economy instead of business class?

Next year in May the legislated national minimum wage of R20 per hour kicks in. I already hear a gasp of derision from some company’s and business owners in our industry. Here is some perspective. If inflation remains the same it would mean an extra 58c per hour for our valued employees. Or, two extra cartons of milk and a frozen chicken a month.

 

Let’s invest in our people.

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any entity or business associated with the author. Examples of analysis performed within this article are only examples.  Assumptions made within the analysis are not reflective of the position of  any entity or business.