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A minimum wage for all?

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It took several years of hard-fought negotiations among social partners in Cyprus to conclude a national minimum wage, set in stone earlier this year, with an option to increase it in the new year.

Then, all stakeholders (employers, unions and the government) would review a possible increase further down the road, but not too soon.

This week, the social partners were supposed to agree on a commonly accepted increment during a meeting of the Labour Advisory Body, but there was no consensus as there was a divergence in the final figure that is to be added in the basic pay for the 25,000 or so low-income workers in the private sector.

As with the issue of the penalties on early retirement, here, too, Labour Minister Panayiotou is expected to drive a two-way bargain to get both sides to compromise.

However, the Labour Advisory Body was also expected to discuss the issue of foreign workers, whom the employers need in the construction, retail, restaurants and hotels sectors, where there is a great shortage of hands, while trade unions see them as a threat, keeping costs low, and losing any argument for pay demands for locals.

The matter is not that simple, as some hotelier-employers pay foreign workers, many of them asylum seekers or migrants, the same as local hires, but at the lowest level, while adding a bonus of free accommodation and food, effectively increasing the wages.

Local workers say this is unfair and that is why they are being forced to accept low salaries and harsh conditions, simply to keep their jobs.

Everybody seems to be turning a blind eye to this reality, as did the pro-hotelier government of the past ten years.

There is no doubt that there is a shortage in the labour market, especially in the unskilled categories. At the same time, some hoteliers and restaurant owners seem to prefer low-paid staff, regardless of the level of service.

Considering the exorbitant rates that hotels and restaurants are charging during the holiday period, mostly unjustified, it is no wonder that Cypriots are opting to travel overseas, where they would get value for money in the destination, stay, quality of food and service.

Come January, and through to the start of the summer season in April, hoteliers and restaurants will be advertising special offers for locals, customers they have long lost, and who will not replace the loss of tourists from Russia, Ukraine and now from Israel.

Trying to make a quick buck, while not seeing the bigger picture of maintaining loyal and repeat customers, is wrong. And this is the bad image that we project to the outer world.

Perhaps, with all the talk about minimum wage, there should also be a way to reward those hard workers who contribute to the quality of the service provided. While those who provide a poor quality of service, including abuse of their workers’ rights, local or foreign, and who do not re-invest the high rates they charge, ought to be punished by market forces and not allowed to operate at all.