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

Business Analyst - Surrey - Permanent - Up to £50k DOE

£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***ASP.NET Developer - Cheshire - £35k - Permanent***

£30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***Solutions Architect*** - Brighton - £40k - Permanent

£35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

Senior Research Fellow in Gender, Food and Resilient Communities

£47,334 - £59,058 per annum: Coventry University: The Centre for Agroecology, ...

Day In a Page

Read Next
 

Taking on Ukip requires a delicate balancing act for both main parties

Andrew Grice
Today is a bigger Shabbes than usual in the Jewish world because it has been chosen to launch the Shabbos Project  

Shabbes exerts a pull on all Jews, and today is bigger than ever

Howard Jacobson
Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker