‘Our last resort’: Students’ fave spots forced to raise prices when minimum wage increases

As minimum wage goes up, students’ favourite food spots say they “don’t have a choice” but to raise prices. But despite the strain on businesses, hospo workers are glad to see their staff earning more money as the cost of living increases. 

At the start of April, the minimum wage will be increased from $20 an hour to $21.20 an hour, helping workers afford the rising cost of living. However, this means some businesses are forced to reassess their prices, including Massey students’ favourite spots.  

Fidel’s Cafe general manager Claudia Brochu said, “Our last resort is gonna be a few prices across the menu that are gonna have to go up by a dollar or so to help offset the wage costs.”  

“It's a bit of a shit timing to put minimum wage up for hospitality businesses at the moment who have been struggling for the last month … we’re gonna try to cope.”  

Fidel’s has been a Welly staple for 25 years, just a few minutes’ walk away from the Massey Wellington campus. Around ten workers are paid minimum wage out of the 23 staff members at Fidel’s and half of the staff are students. Brochu said, “One of the only things we can do really to prepare is making our menu even more cost efficient, reducing the cost of production and be more on top of our food costs and fixed costs.” 

Fidel’s prices were raised and cost efficiency was improved last April when the minimum was increased to $20 per hour. “From early April, again there's gonna be some items, mostly across the menu and our cabinet food, that are gonna be going up. We just don’t have a choice really.” Brochu said increased prices are also due to the price of goods increasing.  

While the manager side of Brochu was nervous to see minimum wage continue to rise again and again, she was happy for her staff to be receiving more money. “It is great because the cost of living in New Zealand has been going up quite fast.” 

“I think it is reasonable, definitely in terms of like everyone being able to look after themselves even if they work in a less scaled area … Especially in Wellington with the price of housing and flatting being so high so I don’t think it’s a bad thing.”  

“I’m just hoping that customers will understand that the high minimum wage, which is great, has to be reflected in the cost of their brunch.”  

Palmerston North Black Pearl Cafe store manager Cheyenne Phills said, “Some of our prices are going to have to increase a little bit just because of inflation and everything.”  

“When minimum wage goes up, prices will also go up.” Black Pearl is a student favourite, with great bubble tea. The business pays minimum wage to around six staff who are all students.  

Phills said prices going up by around $1 to 1.40 for each item will help accommodate the new minimum wage. “It will help us to support our staff and make sure everyone is happy and getting the hours that they want and also to help us continue to deliver good service and good foods to the customers as well.”  

Phills felt minimum wage going up was great for staff. “It is quite reasonable because I see that students who are working, they need to be able to afford the cost of living and the cost of living is going up.” Students working at the cafe are “happy to be getting a little bit more money,” Phills said. 

Albany’s Willow Cafe owner Tony Khongphet said their prices may rise as they begin to pay staff the new minimum wage. “We will look through all the expenses by the end of March and increase the price according to the supplies cost and minimum wage being changed … we will focus more on the system and staffs to work more efficiently and cost effective.” 

Khongphet agreed with the new minimum wage as “the cost of living has been increasing since the pandemic situation”. 

“The new minimum wage would be affordable both of the normal economic situation or pandemic situation with government financial support.”