Clearer than ever, we can see that those workers who have historically been the poorest paid are some of the most important of all. Eddie Conlon argues it’s time to pay them what they deserve.
The Covid-19 crisis has shone a light on those who really matter in society. Public health is being fiercely defended by workers who are risking their lives to run the health sector, ensure public transport functions, and food shops and pharmacies are kept open in extreme conditions.
Whilst most workplaces shut to prevent the spread of the virus, retail workers bravely continue on. Shop workers are keeping the supply chain going – literally keeping food on our table – and often without masks or any protective visor around the till.
The MANDATE union website quotes Patrick Killeen, a Dunnes Stores worker from Ballina:
“Many of us are scared. While the government has told everyone to stay at home, it’s not possible for us. We have to make sure there’s food on the shelves, and we’re not taking this lightly.”
Nor should they. On April 6 it was reported that four grocery workers had died in America, and The Irish Global Health Network highlighted a “disregard of hygiene standards” in some shops.
It described supermarkets as “high-risk sites of infection” and urged that “supermarkets should adhere to the same guidance and practices that are being exercised in healthcare facilities, particularly for vulnerable shoppers.”
Business is Booming
As shop workers are under increasing pressure, business is booming. In Ireland, March was the biggest month of grocery sales ever recorded .
The latest figures from Kantar (the self-styled ‘global expert in shoppers’ behaviour’) show that Irish people have spent €2.8bn in supermarkets and grocery shops over the past 12 weeks. The average household spent an extra €122 on shopping in March – 27% more than the same month last year.
The growth was shared across all the country’s major supermarkets and retailers – with Dunnes, SuperValu and Tesco all recording 10% increases. Lidl saw the biggest hike at 14.7% with sales at Aldi growing by 11.8%.
It’s looking like a bumper year for the giant retailers, along with big online providers such as Amazon who will also profit from this awful crisis. For some retailers this will follow a previous bountiful year in 2019, when Tesco (in Britain and Ireland) reported a 28.8% rise in annual pre-tax profits to £1.67bn. But high levels of profitability are not unusual in Irish retailing. The Central Bank Quarterly Bulletin for Q4 2019 reported that:
“grocery retail profits may be relatively high in Ireland. Of the countries for which data are available, only Malta and the Netherlands exhibit higher profitability in the groceries sector…This relatively high profitability compared to some other euro area Member States, such as Germany, has been a consistent feature for most of the past 20 years, with the exception of the period of the global financial crisis.”
This is explained by the domination of the sector by the top 5 grocery retailers, who account for almost 90 per cent of the groceries market. This facilitates higher mark-ups, and profitability, leading to higher costs for us all. In 2018, Ireland had the third highest food prices in the EU.
This relatively high level of profitability is matched by relatively low levels of pay. In the South, recent data from the Central Statistics Office provides detail on earnings for 2018 and shows that median income was €592.60 per week. Pay at two thirds that amount is the threshold for being considered low paid. The CSO reported that 28.7% of workers were earning below €400 per week – roughly the two-thirds threshold – and are officially classified as low paid
But it is much worse for shop workers and those supplying shops. The 156,400 people employed in the wholesale and retail sector earned a median annual wage of €441.13 per week. That’s 25% below median earnings for the economy as a whole. And 44% of them were earning below that €400 a week marker. This is low pay on a massive scale. Average hourly rates in the top 3 chains range from €10.11 in Supervalu to €11.30 in Dunne’s.
While employers will whine about paying decent pay, European comparisons, based on Eurostat data for 2019, show that labour costs in wholesale and retail here are 6% below the average for the EU-15 (including Britain), and 21% below the average for more developed EU countries – essentially the EU-15 minus the poorer Mediterranean countries.
In fact, labour costs in Ireland are the 10th lowest in the EU-15. Combine this with the fact that living costs here, such as rents and childcare, are among the highest in Europe and there can be no doubt but that Ireland is a costly place to live. Eurostat data shows that Ireland is the second most expensive country in the EU, second only to Denmark, with price levels 29% above the EU average.
Moreover, non-wage costs, such as employers’ PRSI, are half that of the EU-15 and about a third of what’s found in countries such as Belgium, France and Austria. As the recent People Before Profit publication, Your Rights at Work, showed, Ireland has low levels of social support and low levels of workers’ rights compared to other developed economies, partially as a result of these low levels of employer social insurance.
The overall compensation package available to workers is therefore totally inadequate. This is particularly the case for low paid workers who, for example, are unlikely to be paid sick pay as there is no statutory requirement to do so.
Workers in the private sector must wait for 6 days (the average in the EU is 3) before being paid anything in state benefit. Replacement levels, the amount of your earnings covered by benefits in Ireland, are estimated at around 36% – the third lowest in the EU.
Show them their Worth
Therefore, those workers who are rightly being given high praise are still working in an industry with high profits, high price levels, and low pay. Tesco recently agreed to give their workers a 10% bonus from the 9th of March but this will be reviewed in May.
Similarly, Dunnes Stores agreed to a 10% Covid-19 premium payment backdated to March 9 and a COVID-19 sick pay scheme. This followed pressure from a Mandate petition signed by more than 3,000 workers. Aldi also signed up to the 10% bonus which will stay in effect until the end of April.
These increases are well deserved given that all these workers are now working much harder and are taking considerable risks. But if we want to show retail workers how valued they are, is it time we paid them properly, gave them decent working conditions and looked after them when they are sick?
At a minimum, the following needs to happen:
- Ensure workers’ safety is prioritised. Shops and supermarkets that are not operating safely should close. If workers choose to walk out in these situations they should be fully supported by their unions;
- Mandate must resist any attempt to remove bonus payments after the crises. There should be a major drive to increase union membership across the sector;
- Shop workers (and everyone else) should have a minimum Living Wage of €15 an hour. The Living Wage was revised upwards in 2019 to €12.30. Due to the high cost of housing, a recent Eurofound report estimated that the living wage rate for a single adult in Dublin would be €14.45 per hour, climbing to €17.15 for a single adult with one child. This suggests that a rate of €12.30 would leave workers struggling to meet living costs, especially in Dublin.
- Employers should be forced to provide full sick pay from the first day of illness. Illness Benefit should not be any lower than the €350 currently being paid. This should apply to other forms of leave, such as Maternity and Paternity Leave.
These measures would represent a small but important step towards properly valuing the workers who are helping keep us fed and watered during this crisis. We bailed out the banks to the tune of €64b during the crash. It’s time now to bail out the workers who really matter.