A FOCUS on cutting wages in the restaurant sector will not address the problems facing the industry, according to a report by think tank Tasc.
The agency, which promotes economic equality, says the abolition of wage agreements for restaurant workers will heighten inequality and depress consumer demand. Removing the pay scales would “mean a reduction of just 61 cent per customer for a meal costing €60 for two”, according to the nine-page briefing document.
The exchequer would lose about €1,143 for every full-time general worker whose wage was reduced to the statutory minimum said Sinéad Pentony, Tasc’s head of policy. “An across-the-board 8 per cent cut in wages in the hospitality sector will cut consumer spending by approximately €170 million.”
It recommends instead a temporary reduction in VAT and excise taxes for restaurants. The report also suggests the Government could issue “time-limited consumer vouchers to all adults to be redeemed at restaurants”.
A Square Deal? The Real Cost of Making a Meal in the Restaurant Sector tests the analysis earlier this year from the Restaurant Association of Ireland, seeking a reduction in the Joint Labour Committee pay scale which offers a premium to the sector for the unsocial hours worked.
But Tasc says “hotel and restaurant workers are the lowest paid of any sector”. The latest CSO data shows the “average weekly pay in this sector was €351, or just half of the national average of €698”, the document says. It adds that reducing wages would have a minimal effect on stimulating demand.
The report recommends an alternative strategy “focusing primarily on boosting consumer demand and addressing those factors such as commercial rents and input prices, which have a demonstrable impact on profitability”.
Tasc says it will propose to the Oireachtas Committee on Enterprise it launch an investigation into why Ireland has high food, alcohol and beverage costs.
