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Irish restaurant sector at serious risk

The Restaurant Association of Ireland made the news yesterday with their claims that the Irish restaurant industry is in serious trouble.  They say that one in three restaurants are due to close within six months, potentially causing the loss of a further 21,000 jobs.   The RAI blame high rental costs, VAT and excise duty, and high staffing costs for the financial problems that restaurants find themselves in, and recommend that the minimum wage be lowered to €7.65 per hour.

Tom Doorley agrees with the minimum wage recommendation in his analysis of the report on his Megabites blog, saying: “According to the RAI, Ireland is the most expensive country in Europe in which to run a restaurant and I can well believe it.”  It’s also true of course  that Ireland is a very expensive place to live, and lowering the minimum wage and taking away Sunday overtime is going to adversely affect people who are already not terribly well paid.

It would seem to me that the RAI have a point when they say that many restaurants have lowered their prices, and are just faced with unsustainable business conditions, that have yet to catch up with the economic reality.  But I always resent it when the first solution floated is to cut the wages of the lowest-paid.  What do you think?


  1. Lowering the VAT would also help reduce the cost to the customer, while maintaining the tax take on the earnings of the staff.

  2. I agree entirely. It seems to be a kneejerk reaction everywhere. How about getting the rents down if possible? I also think that many places got away with high prices, poor service and so so food for a while and find they might be losing customers now.

  3. France has lowered its VAT on restaurants and cafés to an all time low of 5.5%, why can’t this be done here? I wouldn’t recommend lowering the minimum wages. How are these people going to cope? If life is so expensive than most of us can’t afford dining out, it will be even worse for those on less than minimum wages.

    Also, I don’t understand how some restaurants can provide good quality food at a lower price when some cannot? Surely, rather than offering a top notch menu at unflated prices, they would attract more people by serving more simple food at affordable prices? And talking about catching up with economic reality, how can some places still sell sandwiches at more than 5 euros? And baked potatoes at 10 euros? And pasta at 15 euros or more? Don’t always blame the rents, some restaurateurs are just plain greedy

  4. I went to a Bay (Clontarf) cafe/restaurant 6 weeks ago & had pancakes & coffee with my wife.
    The bill? Just over €30, not including tip.

    I haven’t been to any cafes or restaurants since.

    Want to entice me back? Lower the ludicrous cost of your food.

  5. The minimum wage should be cut across the board, not just for the restaurant sector, it’s just the equivalent of the pay cuts or public sector levies in other forms of employment. We need to lower our cost to do our best to increase the amount of employment, not try to maintain the standards of those already employed. The same applies in many other areas too – the last hike in taxi rates should also be reversed.

  6. As someone working in the restaurant business, I just have one small question…

    Sunday overtime? What restaurant (which isn’t in a hotel) has ever offered that! There is no such thing as overtime or holiday time in lieu. Some restaurants might pay you for the extra hours you work, but others just expect you to work till the job is done and you get paid per shift. I’m not complaining, it’s just how it works.

  7. Otto, in this case, ALL wages need to be cut. Not just the minimum rate. Or the difference between poor (future very poor) and the obscenely rich would be even greater

  8. Sure, wages are taking a hit across the board. The issue of course is that there isn’t any legal restriction on lowering someone’s pay from €19 to €17 an hour, and it’s happening all the time, but in the case of the minimum wage, the law stops a similar reduction.

  9. Otto, there IS legal restriction on lowering pay from €19 to €17: your employers can’t change the terms of your contract without consent. And of course there has to be legal restrictions on the minimum wage – that’s the whole point of a minimum wage, so that employers can’t get away with exploiting people!

  10. I can’t understand all this debate about the min wage while there is absolutely no discussion about a max wage!I’m heartened to see that Govt has stood firm on cap for Bankers but €500k is still an obscene amount for ANYONE to be paid in these times. I think ALL salaries/wages (public/private sector) should be capped at €100k.

  11. Hey, Naomi, if you’re not getting paid extra on Sunday, your employer is breaking the law! Your employer is required, under statute, to pay you a Sunday premium. The legislation doesn’t specify how much, so it doesn’t have to be too much, but they have to give you something!

  12. The large overheads in ireland, particularly Dublin, are the highest cost on any P&L – staff costing pales in comparison. Cutting the min wage would only serve as a very short term fix with the long term application of weaker staff, and higher short term unemployment.
    It would be like being stranded on an island with an elephant and some mice and telling the mice that they are getting less food so that the ridiculous pile they feed the elephant can stay the same…..
    Lower the rent rates

  13. If you cant afford to pay the minimum wage then you cant afford to be in business and your business should close.

  14. I think that a lot of restaurants get away with paying less than the minimum wage to their staff already, (speaking from experience) who mostly can’t really complain because they are young or foreign… Sunday double pay is hardly seen, and basically you are lucky if you get something for working bank holidays…I think lowering the minimum wage isn’t the solution, the restaurants owners need to learn how to cut their prices, they have been taking advantage for a long time…