Many debates have already taken place regarding the rise in the minimum wage. But what impact will the 3.8% increase have on the hospitality sector?
Gabriel Boisante employs 280 people across his 10 restaurants and bistros. Around a third of them earn either the skilled or non-skilled minimum wage. Asked what financial impact the recently announced rise will have on his business, he replied: “Across the group, we will have to sell an additional 20,000 to 30,000 cocktails” to cover it.
Over the past four years, restaurateurs have already faced various price hikes in energy, raw materials, and wages. However, they can only partially pass these increases on to their customers. Boisante estimates that his prices have risen by 15 to 20% over the same period and said he does not wish to place an even heavier burden on his customers. The new minimum wage will also affect his margins, although he stressed that he has no plans to systematically increase prices in his restaurants.
“The rising cost of living affects everyone, including customers. Meeting up over a meal or a drink should be affordable for everyone. We do not want to be a restaurant where people pay €7 or €8 for a bottle of water”, Boisante said.
His employees are delighted with the minimum wage increase, and he is delighted for them, the entrepreneur explained. However, he fears that his staff will only seemingly benefit from the 3.8% rise, noting that a side effect of the measure is that it fuels inflation. Boisante argued that a household’s main expense is housing, but that “nothing is moving on that front”. In his view, the wage increase will have “absolutely no impact” in this area – quite the opposite: “it will have a proportional effect on a household’s expensive outgoings”, Boisante said he worries that the measure could exacerbate poverty and widen the gap between rich and poor even further.
Boisante, a member of the Luxembourg Socialist Workers’ Party (LSAP), criticised the fact that the government is placing the responsibility for people’s well-being onto the owners of small and medium-sized enterprises. An increase in the minimum wage is not enough, he stressed, a real reform of social taxation and measures to promote affordable housing are also necessary.
