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Our View: Low wages mean labour will have to be imported for hospitality sector

Whenever the economy is on a sustained growth path some sectors experience labour shortages. Some 15 years ago when everyone was playing at being a developer, there was a big shortage of construction workers, whereas today hotels and restaurants are finding it difficult to find staff. Such is the concern that representatives of the employers’ organisations Oev and Keve had a meeting with the president and ministers on Monday to find solutions.

One suggestion was the lifting of all restrictions on the employment of students, asylum seekers and political refugees. The government had lifted the restriction on asylum seekers recently in order to help but the problem persisted which is why Keve and Oev asked that it was expanded to the other categories. If this failed to solve the problem employers would seek to employ workers from third countries on the grounds that the European market cannot cover their needs.

How is it possible the European labour market could not cover the needs of the hospitality industry of Cyprus? Is this because the wages being paid are too low to encourage European nationals to move to another country? The wages might not be that low, but rents are high which is a major disincentive for anyone moving here for work. The same applies for third country nationals even though the money left over after rent and bills are paid might still be higher than what they would be paid back home.

The alternative is for hotels and restaurants to significantly increase the wages they offer, but they would cease being competitive which would mean higher costs and lower revenue – a recipe for economic disaster. In the end, importing workers from third countries would be the only option because there are no locals prepared to do hotel or restaurant work just as no Cypriots work in petrol stations and on farms. If some were willing to do these low-paid jobs during the recession almost nobody is prepared to do them now.

Inevitably, Keve and Oev’s representatives brought up the people on the minimum guaranteed income (MGI), arguing that the government should be stricter in administering this benefit so it was not exploited by individuals unwilling to work; 10 per cent of the 24,500 recipients could be trained to work, said the Oev representative. The MGI seems very low to act as a disincentive to work as it had been suggested by some and training its recipients is not the answer. In the end the government will have to allow the import of foreign workers even though it is not the ideal solution because there are simply not enough Cypriots or EU nationals prepared to work for the money being offered by the hospitality industry.

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