Will UK wage increases hurt Hospitality? New US research suggests it won’t

There’s been a lot of scaremongering in the UK from the press, businesses and some professional associations and trade bodies about the new National Living Wage (NLW) and the “burden” its salary increase will place on retail, care and hospitality businesses, which often employ lower paid staff.

Increased wages are a way to reward hard working staff

The Institute of Hospitality takes a more positive perspective. Our Chief Executive, Peter Ducker, posits that the National Living Wage is an opportunity for hospitality businesses to retain and reward their best employees. And new long-term research from hospitality experts in the United States suggests wage increases won’t have the negative effect the naysayers are suggesting.

According to academic research published by Cornell’s Center for Hospitality Research (CHR) at Cornell’s School of Hotel Administration (SHA), “US federal and state minimum wage increases over the past twenty years have not resulted in fewer restaurants or lower employment in the United States”. The new study, “Have Minimum Wage Increases Hurt the Restaurant Industry? The Evidence Says No!,” was written by SHA faculty Michael Lynn and Christopher Boone and is available FREE from CHR.

To control any impact on the organisation and its employees, hospitality businesses should prepare now for the increased salary costs resulting from the NLW. Instead of viewing the NLW as a burden, businesses should see it in a positive light. The Institute’s new Management Guide, from contributors BusinessHR, explains what hospitality employers need to know to get to grips with the NLW and reward their hard-working employees. Find the new guide at Management Guides.




Author: Institute of Hospitality

Established in 1938, the Institute is the international professional membership body for managers and aspiring managers who work or study in the hospitality, leisure and tourism industries. We help more than 10,000 hospitality professionals in 100 countries grow their knowledge, professional profile and expertise offering a wide range of high quality membership services such as targeted and regular industry networking events, hospitality qualifications and extensive online quality resources such as free management guides, Hospitality magazine, webinars, ebooks and ejournals. To learn more about our many member benefits, view our website or email membership@instituteofhospitality.org