Living Wage

This article is part of a sector report on supermarkets - December 2014



Supermarkets fail to live up to a Living Wage


In the UK, supermarkets employ roughly one million people, yet shockingly only Aldi and Lidl have made the commitment to become a Living Wage employer.

See 'Lidl is the first UK supermarket to pay a Living Wage' >

Campaigners attended Tesco’s Annual General Meeting (AGM) in June 2014 to deliver a petition signed by over 32,500 people, calling on the supermarket to pay staff a Living Wage. Tesco is the UK’s biggest private sector employer and it is argued that through committing to pay a Living Wage it, along with the other big four supermarkets, could make a big difference towards reducing in-work poverty.

There are currently an estimated 5.28 million workers in the UK paid below the Living Wage.

The Living Wage is an informal benchmark, not a legally enforceable minimum level of pay, which is calculated at a rate that ensures a basic minimum standard of living. The level has recently been raised to £7.85 outside London and £9.15 inside London.


The challenge

Persuading employers to acknowledge this rate and agree to adopt these voluntary levels is a challenge. In response to the petition, Tesco chairman Sir Richard Broadbent said the company wasn’t ‘deaf’ to concerns, but argued that its benefits help to push wages over the £7.65 per hour mark.

ShareAction CEO, Catherine Howarth, stated: “Tesco has failed to commit to Living Wages, insisting that its benefit package ensures no employee is condemned to poverty. However [benefits such as] discount vouchers can’t be used to heat family homes.”

In a report in 2012 the Fair Pay Network, through its survey of 100 employees from each of the supermarkets over four UK regions, found that the average wage per hour was £6.83 (the National Minimum Wage was £6.08), while the average contracted hours were 27 per week. The report found that over half of the respondents had to supplement their hours with overtime, a second job or state benefits.


Many organisations accredited

The Living Wage Foundation is helping the private and public sectors improve pay conditions and now has over 1,000 organisations accredited, including big names such as Nationwide and Nestlé (for its UK operations only).

However Rhys Moore, Director of the Foundation said: “There is still much to do as several sectors, including retail, continue to lag behind, with the low wages of their workers being topped up by in-work tax credits. The Living Wage campaign continues to grow with support from the public and media; raising awareness of working poverty. This pressure, combined with evidence from responsible organisations demonstrating the positive impact implementing the Living Wage can have on business, provides a powerful argument in support of Living Wage accreditation. We will continue to encourage the leading supermarkets to engage with us and learn more about the Living Wage.”




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