Mark Donne: Shelf-stackers aren't the only victims

The cost to the state of subsidising low pay with tax credits and housing benefit is huge

Share
Related Topics

Together, the big four supermarket chains make up the largest block employer in Britain outside of the NHS: nearly 900,000 people work for Tesco, Asda, Sainsburys or Morrisons. And the Coalition is banking on the supermarkets recruiting again in serious numbers in 2012. But a new report by the Fair Pay Network demonstrates how the Big Four are complicit in keeping thousands of people in poverty. In the last trading year, Tesco, Asda, Sainsburys and Morrisons reported pre-tax profits of £3.5 billion; £803 million; £827 million and £632 million respectively. Their executives and CEOs revelled in the bounty with individual remuneration packages ranging from £3m to nearly £7m.

Yet, according to our study, 86 per cent of employees (interviewed across four regions and 32 stores) are not receiving either the London Living Wage, or, outside of the capital, the UK Living Wage. More than half said they didn't earn enough to live on, with nearly a fifth that they could no longer afford new shoes or clothes for their children.

British politicians are falling over themselves to endorse living wages. Boris Johnson says it is "not only morally right, but makes business sense"; and David Cameron has claimed that the concept is "an idea whose time has come". So why do the Big Four maintain a corporate culture that seems designed to hard-wire a low-paid, low-skill culture into the labour market?

One answer is their economic (and political) omnipotence. The Government increasingly needs them to pick up the tab for rising unemployment. Answering Cameron's appeal at his No 10 "jobs summit", Sainsburys has committed to creating 50,000 new jobs by 2020, and the smallest of the four, Morrisons, has announced 7,000 places this year. But this plan is chronically short-termist. The cost to the state of subsidising low pay with tax credits and housing benefit, and the cost to local economies of the enlargement of low-paid employment is huge.

Reliance on corporate giants operating unethical pay structures is not just socially or morally undesirable, it is economically unsustainable. It should be unacceptable that a handful of gigantic operators enjoy colossal profits, low corporation tax and vast executive pay packages, while paying basic rate employees a poverty wage.

The long-term prognosis is even worse. Seventy-seven per cent of workers interviewed said their supermarket had not offered them training for a better-paid role, and only 18 per cent were covered by an employer pension scheme. The orchestration of wage stagnation and insufficient provision for retirement on this scale will bite the UK economy just as hard in the future, as it bites every checkout operator or shelf stacker in the hourly, daily, weekly present.

Mark Donne is co-author of 'Face the difference: the impact of low pay in national supermarket chains' for the Fair Pay Network

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Business Analyst - 12 Month FTC - Entry Level

£23000 - £27000 per annum: Recruitment Genius: A Business Analyst is required ...

Recruitment Genius: Chefs - All Levels

£16000 - £23000 per annum: Recruitment Genius: To succeed, you will need to ha...

Recruitment Genius: Maintenance Engineer

£8 per hour: Recruitment Genius: This is an opportunity to join an award winni...

Recruitment Genius: Telesales Executive & Customer Service - Call Centre Jobs!

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Day In a Page

Read Next
George Osborne appearing on the BBC's Andrew Marr Show on Sunday, 5 July 2015  

George Osborne says benefits should be capped at £20,000 to meet average earnings – but working families take home £31,500

Ellie Mae O'Hagan
The BBC has agreed to fund the £650m annual cost of providing free television licences for the over-75s  

Osborne’s assault on the BBC is doing Murdoch’s dirty work

James Cusick James Cusick
Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

Illnesses, car crashes and suicides

Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
Srebrenica 20 years after the genocide: Why the survivors need closure

Bosnia's genocide, 20 years on

No-one is admitting where the bodies are buried - literally and metaphorically
How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

Power of the geek Gods

Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
What do strawberries and cream have to do with tennis?

Perfect match

What do strawberries and cream have to do with tennis?
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

Team Murray firing on all cylinders for title assault

Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

Nick Bollettieri's Wimbledon Files

Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
Ashes 2015: Angus Fraser's top 10 moments from previous series'

Angus Fraser's top 10 Ashes moments

He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high