Are retailers milking the recession?
Certain retailers have come under fire from Mandate for using the recession as an excuse to reduce staff wages
Print12 May 2010
It has been suggested by Mandate that certain retail firms are attempting to take advantage of the economic downturn by forcing unnecessary redundancies, pay reductions and reduced terms and conditions onto low paid workers despite maintaining healthy profits.
The trade union’s general secretary, John Douglas, was speaking at Mandate’s Biennial conference in the Radisson Blu Hotel in Galway on 25 April. Mr Douglas referred to one of Ireland’s leading grocery and drapery stores which he describes as still highly profitable yet is “pursuing the suspension of allowances for late night, early morning and overtime work. They are also actively undermining the terms and conditions of workers protected by a transfer of undertakings agreement put in place when the company entered the Irish market.”
Mandate represents around 40,000 members, the majority of who are in low-paid employment. Douglas says that feedback from members suggests that right across the sector most retail workers have lost approximately 8-12 hours per week as a result of cutbacks from their employers. “This has resulted in a reduction in income of around €100 for those working full time in the industry.”
“The argument often put forward for cutting workers’ pay is that our rates of pay are out of line with our European counterparts. However, a new research document produced for the union, entitled Milking the Recession, reveals that Irish retail wage costs are not as uncompetitive as some of the employers’ bodies argue,”he says.
“For instance, a report by FGS Consulting for Forfás estimates that the average annual wage for a sales assistant in Dublin in 2008 was €22,000 and in Cork, Galway or Limerick was just €17,500. Despite claims of some industry lobbyists, pay rates in Ireland are not significantly higher than in the UK or other comparative European cities.
He noted that FGS Consulting identified a range of factors, outside of payroll, where costs in Ireland are significantly ahead of the UK or our European counterparts. These include rental costs, utilities, telecommunications, professional fees and local authority charges. “Mandate firmly believes that all of these avenues should be explored and addressed before a debate is even considered about pay reductions for retail workers.”
Douglas said that retailers need to think outside the box before cutting wages as it has a knock on effect for the local economy. “For example, Irish retail workers tend to spend almost all of their income in the local economy. They tend to buy groceries in their local shop, buy clothes in their local drapery store and buy drink in their local pub. Without this spending, the Irish economy would crumble. When a profitable retailer takes money out of the pockets of their employees, it obviously means there is less spending in their local communities and therefore more jobs are lost. It’s a vicious circle.
“What we need in order to get out of this crisis is for profitable companies to live up to their obligations and stop hiding behind bogus calls for wage restraint and pay cuts. In reality, any firm participating in this type of action is not only increasing the hardship on many already low paid and vulnerable families but they are also contributing to the longevity of the Irish economic recession and therefore acting in an unpatriotic manner,” Douglas said.
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