Comment: Retail’s voice must be heard in the pay debate

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As David Cameron puts pressure on business to increase employee pay, it is necessary for the retail sector to participate in the debate.

Prime Minister David Cameron upped the ante in the debate over low wages this week when, speaking at the British Chamber of Commerce, he urged industry chiefs to award staff pay rises this year.

Pointing to an improving economy and low inflation, conditions, he said, had “not been this good for a long time”. He argued that a gesture on pay would help silence those who believe business entrenches inequality. “Put simply – it’s time Britain had a pay rise,” the PM stated.

The address was designed to articulate the pro-business instincts of the Conservatives. But Cameron’s speech will also add to the pressure the retail sector – as the UK’s largest private employer – faces to pay not just a minimum wage, but a ‘living wage’.

The campaign for firms to pay wages calculated as necessary to meet housing, food and other basic needs is building momentum. In November, London Mayor Boris Johnson unveiled a London living rate of £9.15 (outside the capital the bar is set at £7.85). In the same month campaigners targeted a number of high-profile retailers, replacing pricing labels on shelves with price tags highlighting their cause.

There are more than 1,000 companies signed up to the living wage, but retail is noticeable for its absence on that list. Quite aside from any moral arguments, and the obligation on business to support those working their way out of poverty, those companies already participating in the scheme report falling absenteeism, enhanced quality of work and improved loyalty and customer service.

“The living wage spotlight on the retail sector will only intensify”
Chris Brook-Carter

But it is easier for businesses with high margins and low headcounts to make the leap. It is harder for retailers who operate with huge numbers of staff, often with the added complexity of a large proportion of part-time workers.

At a time when growth continues to be hard won, a commitment to the living wage remains prohibitively expensive for retailers.

That said, while retail is proud of its track record on employment, training and the career path from shopfloor to boardroom it offers, its reaction to the growing force of this campaign has thus far been underwhelming. It is struggling to articulate its own contribution to employment and indeed how it proposes to address the challenge laid down before it by campaigners.

The living wage campaign is gaining momentum and the spotlight it will place on the retail sector will only intensify as the economy improves.

The best way to silence those who use the high-profile nature of high street brands as political scapegoats is to take affirmative action, and communicate clearly the many benefits they provide people working in the industry – even if paying a living wage currently remains out of reach.