Supermarket workers’ minimum wage pay topped up by £11bn in benefits, says Citizens UK
Bosses of five million employees are being ‘subsidised’ by the taxpayer
12 April 2015
Supermarket employees do not get paid enough to live on and national minimum wage earnings are topped up by in-work benefits that total £11billion a year, a charity said.
According to the Citizens UK, supermarket bosses who employ five million people are being “subsidised” by the taxpayer as wages they pay do not make ends meet – the BBC reports.
The national minimum wage currently stands at £6.50 per hour for people over the age of 21.
Citizens UK set up the Living Wage Foundation and campaigners have called for the living wage to be used as the minimum instead. It is paid at £7.85 per hour, £9.15 for those employed in London, by companies who agree to do so.
Most people who earn less than the living wage work in the retail sector, the charity also claimed, however the British Retail Consortium said that most supermarkets paid around £8.40 per hour on average when “extra earnings” are factored in.
Retailers have come under fire after investigations by The Independent revealed that not a single high street retail chain has guaranteed staff the living wage.
Nearly 80 per cent of 1,813 retail staff polled by the Union of Shop, Distributive and Allied Workers say that they are financially worse off than they were five years ago. Only 5 per cent said they are better off in comparison.
This is despite the tax threshold being raised to £10,600 per year before the lowest-paid have to start paying to the Treasury. But in-work benefits remain stagnant. The rising cost of living is also a big strain on consumers.
A supermarket worker interviewed by the Mirror said that although she was paid a wage for working at a supermarket check-out, she had to use a food bank more than once as she has been struggling financially, and often goes without.
She cannot even afford to buy the food stocked at her workplace, even with staff discount.
“I was totally embarrassed,” she said about her food bank experiences. “And angry. My wages should be enough to feed me.”
John Hannett, Usdaw General Secretary, criticised the government after the Budget announcement last month for freezing in-work benefits.
He had said: “With the economy growing and unemployment falling, it is time for workers to feel the benefit in their pay packets.”
“Working people and their families are still suffering. The Government claims to have helped the lowest-paid by increasing the income tax threshold. That simply isn’t true, because the lowest-paid were already under the tax threshold and rely on tax credits to provide for their family.
“Under this Government, Working Tax Credit is worth around £500 a year less because it has been frozen for three years and capped at a 1% increase this year,” he added.
There can be no doubt that the national minimum wage is far too low and should be substantially increased.
Workers should not need to rely on tax credits to top up the meagre wages paid by their employers.
But the only long term solution is for immigration to be stopped and reversed, so that the market value of labour to employers is increased and wages rise as a natural consequence of its diminished supply.
This would benefit employers as well, as productivity would rise in tandem with wages. A better paid workforce would also pay more income tax and receive less in tax credits, so helping to reduce the deficit in a virtuous circle of economic growth.
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