No justification for coffee surcharges

20:05, Feb 09 2014

With Waitangi Day occurring on a Thursday this year, Kiwis took full advantage of the public holiday.

 Many also celebrated the little-known ‘‘day after Waitangi, first day of the sevens’’ de facto public holiday peculiar to Wellington, which is why there was hardly anyone at your workplace last Friday. 

But if there’s one First World issue associated with public holidays that irritates me, it’s the surcharge imposed by some cafes.

It’s not the money I mind so much – paying an extra 50 cents for a coffee is hardly a big problem. It’s the principle of the thing. 

The reason some cafes impose a surcharge is because Helen Clark’s Labour government passed a law entitling workers to receive time-and-a-half, as well as a day off in lieu, for working a public holiday. This generous law, mainly affecting low-paid hospitality workers, flies in the face of most labour legislation passed since the 1980s. Before Rogernomics you automatically got paid double if you worked on Sundays and extra if you worked Saturdays. Nowadays only some professionals and consultants have the luxury of charging extra for weekends. 

Even though most pubs don’t impose a surcharge, many cafe owners pass on their increased costs to the customer.


Kiwis might normally accept bad food and service without a word of protest, but having to pay more simply because the holiday means extra labour costs makes us furious.

People like me happily spend an extra two dollars in petrol travelling to a cafe that don’t exact a surcharge for a coffee, even though it only saves us 50 cents.

At least we are teaching the cafe owner a lesson.

When somebody as Right-wing as Paul Henry, who openly fawned over ACT’s new leadership twice last week, loudly condemns the holiday surcharge, you know that it is in trouble.

It finally seems to be on the way out. Some cafes even advertise that they don’t impose it, and reap the rewards with increased custom. 

Strangely enough, the same Kiwis who so hate the surcharge don’t always object to paying extra if they think it’s fair. 

When a bunch of greenies started advocating paying extra for fair trade coffee, many considered it a joke.

Yet today, fair trade coffee is so ubiquitous that if you want coffee made by a greedy multinational that exploits low-paid peasants in tiny Central American dictatorships, you have to ask for it specially.

We know that margins in the highly competitive hospitality sector are super-tight, and that most cafe owners work extremely hard.

Life can’t be easy for them running Wellington’s excellent cafes. 

Yet insisting that every single thing must pay its own way is not how good business works.

Profitable times, such as lunchtime, subsidise less profitable ones. If your margins are so tight that a higher wage bill a few days a year threatens your entire business then should you be in that business? 

What smart cafe owners have done is either not opened at all on holidays, which isn’t that smart when you think how crowded most Wellington cafes were on Waitangi Day, or charged a bit extra the whole year around. 

But the real root of this problem is not government legislation, grumpy latte drinkers or even cafe owners. It is our low-wage economy.

Some businesses couldn’t survive if they were to pay decent liveable wages, so they pay the bare minimum.

When the Government asks these low-wage, low-margin businesses to compensate workers for giving up their holiday on just a few days a year, there’s hell to pay.

The Government also subsidises employers to take on low-paid workers, who also get Working for Families and other forms of welfare. 

This indirectly makes businesses that pay the minimum wage one of New Zealand’s biggest welfare recipients.

If the Government stopped subsidising low-paid workers, I suspect there would strikes in every cafe, hospital, old folks’ home and cleaning company in the country.

Yet overseas experts say we have a rock star economy.

They obviously haven’t met the minimum-wage roadies who bring us our lattes as we loudly enthuse about the brilliant Waitangi Day weather and how drunk we are going to get at the sevens.

The Dominion Post