Businesses say they are struggling to employ staff and are urging the government to allow more migrant workers, but an academic says they will not solve the problem.
A Queenstown restaurant owner expressed frustration this week over Immigration Minister Michael Wood's comments better pay and conditions needed to be offered if they wanted to attract staff.
Flame Bar and Grill owner Lou McDowell had said her business was offering $27 an hour and struggling to attract staff, but the problem was supply and a $50 wage would not be enough.
Other restaurant owners around the country also talked up their rates of pay and conditions, and an Auckland barbershop has closed after 20 years, urging immigration red tape be cut.
However, AUT School of Hospitality and Tourism Professor David Williamson told Morning Report the sector had been reliant on cheap migrant labour for too long, and unions, fair pay and collective agreements needed to re-introduced.
"The employment relations framework that was altered so dramatically after 1984 through the 1990s has left the sector vulnerable to low pay and poor conditions and that needs to be turned around," he said.
"These employees who are working in this industry are our neighbours, our friends, our children, our family, and they are just not getting the pay and conditions that you would want."
He agreed there should not be a return to the restricted, controlled economy of the 1980s, but said it was not a binary choice between one or the other.
"We're seeing a rebound in wages because of the intense competition in the labour market at the moment, but you have to realise that between 1980 and 2000 this sector - hospitality - lost almost 25 percent of the value of its hourly wage and so that's had a massive impact on the sector.
"I think nobody would want to go back to the highly restricted, controlled economy we had but I do think that the way forward is for employers to be able to attract good talent, retain it, pay it well, look after it.
"That's the only way you're going to be able to build a business which produces good profit and continues to provide really great products to the customers."
He said he had heard the argument from owners that they were paying as much as they could, but said they simply had to be able to run a business with enough profit, that added enough value to pay competitive wages and conditions.
"Really the only response from a lot of those people has been 'well, we need to import migrant labour again, we need to start pouring in cheap migrant labour to help us get through this' but that's not a step forward, that's a step back," he said.
Doing so would simply add more supply into the market, curbing pressure for rising wages again.
"That sort of labour is inherently fragile, it's temporary. You know, those visas that migrants come in on are temporary visas, they only stay for two or three years at the max, so you can't keep training ... you can't get that consistency with your staff."