Both workers and business owners in the hospitality industry are criticising the 50c increase in the minimum wage.
Workers say the pay rise is a tragic disappointment that will entrench poverty while owners say the cost of any increase will simply hurt consumers.
Labour Minister Kate Wilkinson announced yesterday the minimum wage will go up from $13 an hour to $13.50 from April 1.
TV ONE's Breakfast today heard from both sides of the hospitality industry and neither is happy.
The Service and Food Workers Union's John Ryall said it is "an extreme disappointment" to workers in the sector and other low-paid industries.
"It needs to be better. There's a majority of parties in Parliament who support $15 an hour. It needs to happen, it needs to happen now," he said.
But Hospitality New Zealand president Adam Cunningham told Breakfast it is the consumers who will cover the cost of a pay rise.
"Any sort of increase forced upon an industry is going to result in the consumers picking up that tab, because there is no fat in this market," Cunningham said.
"The concept that there's fat cats in hospitality making lots of money that can afford to cover this increase is just not reality."
Ryall believes any increase passed on to consumers would be small and something "they're quite prepared to pay".
The minimum wage needs to be nearer to the $19 to $20 paid to hospitality workers in Australia, he said and that New Zealand is "out of kilter".
Cunningham disagreed and said making a comparison to Australia is unrealistic.
If New Zealand wants to pay the same rates, consumers will see a 25% to 35% increase in their coffee prices, he said.
Cunningham said the hospitality industry is made of up 85% small business owners who barely make the minimum wage themselves.
"If we talk about it across the board, we have to look at the industry being successful so that we can look after the people we've got working in the industry. Not just employees but employers as well."
Latest NZ News Video
-
ONE News Minute 9am update: May 26 (1:00)
-
Kids cough up $14m for Government (1:50)
-
Education ministry 'barbaric' (1:55)
