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

Senior QA Engineer - Agile, SCRUM

£35000 - £50000 per annum + benefits: Ashdown Group: Senior QA Engineer (Agil...

Marketing Executive - West Midlands - £28,000

£26000 - £28000 per annum: Ashdown Group: Digital Marketing Executive (SEO, PP...

Retail Business Analyst

£40000 - £50000 Per Annum: Clearwater People Solutions Ltd: Our retail client ...

Senior C++ Developer

£400 - £450 Per Annum possibly more for the right candidate: Clearwater People...

Day In a Page

Read Next
 

i Editor's Letter: We are winning the fight against extreme poverty and hunger. It's time to up the ante

Oliver Duff Oliver Duff
David Cameron addresses No campagn supporters in Aberdeen  

Scottish independence: Cameron faces a choice between destroying his country or his party

Matthew Norman
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week