#the reset

Today, Tuesday 6 July 2021 at 11am we are conducting a two minute ‘lights out’ protest in our outlets. We hope many other hospitality businesses will be doing the same and that our customers will be sympathetic to our actions as it will also ultimately affect them. This action is aimed at raising awareness about the government’s proposed changes to the immigration rules, which will affect skilled migrants currently working in New Zealand and most likely prevent many others from ever coming here.

We, like many other hospitality business owners, and the industry representation of the Restaurant Association of New Zealand, are very worried that these changes will have severe negative effects on our industry as well as many other industries that currently employ skilled migrants, i.e. healthcare, childcare, aged care, construction, horticulture, all will all feel this change in policy most acutely.

The proposal by Immigration NZ

On 7 May I attended a webinar held by Immigration NZ that laid out the changes proposed to the rules that govern, who is allowed to come to NZ to work and who isn’t. Briefly summarized they consist of three major changes.
From the 1st of November 2021:

  1. All employers, who wish to employ skilled migrants need to become accredited. That means employers must prove in principle that they are good employers that play by the rules.
  2. Skilled migrants who do not earn double the median wage (currently $53,040 per annum, so $106,080 per annum) will only be eligible for a one year visa, with two rights of renewal and then they have to return to wherever they came from.
  3. Residency work for migrants earning less than double the median wage ($106,080 p.a.) will no longer be possible.

The proposed changes can be found here:

Are these good ideas?

To answer this question, we need to ask ourselves what will the outcomes be, should these ideas become the new rules.

Should all employers, who want to employ migrant become accredited?

I believe that that is a good idea. In fact, our bakery has already been an accredited employer under the old voluntary accreditation scheme since 2019. Accreditation is going to ensure that everybody plays by the rules of being a responsible employer and those, who do not play by the rules and do exploit migrant workers, will have a much tougher time in doing so. So the new rule will level the playing field for everyone and will hopefully eliminate bad faith actors.
So, I am all for an accreditation system for employers!

So what about point 2 and 3?

In our industry a reasonable proportion of workers come from outside of New Zealand. Especially in Auckland and Wellington. Hospitality in most Western countries’ main cities is like this. Why? Maybe, because if you speak enough of the language you can work in hospitality in almost any country. If you are a waitress or waiter and you are good with people and enjoy the active, on-your-feet style of work it is relatively easy to pick up a job. If you are a chef, pastry chef, or baker, you can work almost anywhere, even with limited language skills. Because it is about making food and all people everywhere in the world eat. The work suits people, who are not highly academic, those who do not enjoy studying and reading and passing exams. Not everyone can be a lawyer, doctor, scientist or engineer and not everyone wants to study humanities, or sees themselves as a creative thinker, or aspires to become a designer or marketing guru.

In short hospitality is a people industry, where you work with lots of people and you work directly for people. We make food and serve it to people with gratitude. It is meaningful work. You interact with customers and they will let you know pretty soon, if they are happy or unhappy with the product and the service. It is fast paced, direct and fun, it is an age old profession and will never go away as long as we human needs to eat.

Has the high proportion of migrant workers suppressed wages in the service industries?

Here in New Zealand we are lucky to have a great school system with public schools that are excellent (for the most part). My oldest son goes to Mount Albert Grammar School in Auckland and my youngest will go there next year too. It’s a big public school with nearly 4000 students. They have many different options for courses and the extracurricular programme is stunning. When I went to school in Germany nothing of the kind was offered at any public school anywhere, only expensive private schools (of which there are very few in Germany) would have come anywhere near that, if they even did. The teachers are engaging, the curriculum offers a broad range of subjects, the school cares about its students. I don’t think that there are many countries in the world, where public schools are this good. So we are privileged.

New Zealand’s public schools are excellent at bringing kids up to university entrance levels. If we collectively think that’s a good thing and we want our kids to go down that route, we need to ask ourselves, where the workers are going to come from for the jobs that do not require university education!

In NZ most high schools focus very much on academic achievement and push the kids to do well, so they reach university entrance level and pursue higher education. Mt. Albert Grammar prides itself to score high on or above the national average for NCEA level scores, excellence endorsements, and scholarships. 68.1% of its students reach university entrance. What this means is the system has gotten very good at bringing youngsters up to a level, where pursuing a university education is possible and it definitely gears them to think it is desirable. Academic success is widely celebrated.

However, we have many jobs that need doing that cannot easily be automated in the near future and that do no require a university degree. Apprenticeships would be much better suited to provide skills and education for jobs with highly practical aspects. But these careers are not highlighted as desirable anymore. Or so it seems.

And while the government seems to have recognized that we are not training enough people in the industries that are most crying out for workers, and has
last year launched an apprenticeship boosting programme that funds or supports budding apprentices and the businesses that employ them, it will take years to bring young people into the system and teach them the skills required to do a good job. It takes years for kids to become productive workers and learn all the parts and be able to shoulder responsibilities and lead teams. This cannot be achieved in a short period of time, certainly not by November 1.

I have spoken to many of my migrant employees, who come from countries like India, Sri Lanka, the Pacific Islands, the Philippines, Indonesia and South America. I asked them, why did you come here? Would you have come, if you knew that you get only a one year visa, maybe twice renewed, but then you have to leave? And guess what, most of them said they wouldn’t. They came to New Zealand because they hoped for a better life through honest hard work. Most of them are frustrated in one way or another with the conditions in their home countries. They can see the massive problems that exist in many areas in their home countries and they hope to be able to raise their own children in more safety, with better schools, less corruption and more freedom. Isn’t that the same motivation that compelled the ancestors of most New Zealanders?
People, who are smart, don’t want to put up with needless suffering and oppression and prefer to rather do honest and hard work. They contribute massively to New Zealand and many studies have shown that migration has a net positive effect on western economies*.

So we can assume that these types of migrants will no longer come to New Zealand. The apprenticeship programmes will take years to produce the equivalent workers. If they do at all, which is questionable, i.e. there are nearly 9000 positions unfilled in bakeries around the country and currently around 100 bakery apprentices in the pipeline…. So it would take 90 years at current levels to fill the positions.

The most likely effects of the proposed government changes will be a massive shortfall of workers in an industry that is already terribly understaffed now, due to the migrants that have left due to Covid-19. It will inevitably lead to businesses first trying to steal staff of each other- something that is already rife in the industry – but it will ultimately lead to many businesses failing and closing their doors, because it will become impossible to find staff. Your local watering hole, favourite coffee spot, bakery, or restaurant may soon no longer be there.

And the hospitality industry is not the only industry that is going to be affected. Many workers in healthcare, childcare, aged-care, the construction industry, logistics, and horticulture will be affected too.

None of these industries are exactly Silicone Valley type industries with huge margins being skimmed off at the top by greedy shareholders and CEOs. So it’s not a question of just sharing the huge profits more equitably. In hospitality many owners work in the business for less than they pay their staff. So have migrants suppressed wages? No, I think our collective expectations and desire to have our food and services be as cheap as possible has suppressed wages. If we were happy to pay as much for food and services as we are apparently happy to pay for houses, business owners in hospitality and other service industries could pay their workers more too.

Where are the workers going to come from?

So if the only way to get workers is by paying significantly higher wages so that either New Zealanders, who currently don’t want to work in the industry will return in droves, or that the wages meet the threshold the government imposes for longer term visas – $106,080 p.a. or $51.00 per hour – then we should be prepared to pay a lot more for our food and care services. And I mean A LOT MORE! Think $15.00 for a flat white, $25.00 for a loaf of bread, $50.00 for your café breakfast, and $90.00 for you main at your favourite restaurant. Are we ok with those prices?

Hospitality business owners feel that the government should openly discuss the effects and possible outcomes. First they should seek to understand by talking to industry leaders and representatives – something they simply have not done – and then they should ask the general public, if that is what we all want. Are we as a nation prepared to pay these prices for our goods and services. If the answer is yes, then we are all good I suppose. Then we have all agreed that labour of the kind performed by people that work in the various service industries is valuable to us and we are happy to reward people doing these jobs accordingly. Then we won’t complain and accuse the businesses charging these prices or ripping us off. Then we will come closer to the Scandinavian Utopias that we are apparently aiming for.

I am not against it, but I want to have this discussion openly, so we all know what is coming. I don’t want the government congratulating themselves for lifting wages and businesses copping the blame for raising prices.

We simply cannot have it both ways. High wages and low prices. That’s all!

The Restaurant Association of New Zealand is campaigning to introduce workable solutions to skill shortages – to find out more go to https://www.restaurantnz.co.nz/hospo-reset/

Click here to sign the petition which closes on 1 August 2021.


* Here are two links that speak to the effects that immigration has on the economy and societies.

  • The first is a short summary article with several references – click here.
  • The second link here is an in-depth study done by the OECD specifically talking about immigration in New Zealand, which goes into great detail on the effects of immigration on the economy and society and it also concludes a long-term positive effect. Read it here.

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