20 January 2012

Bad News on Redistributing Supermarket Salaries

Zoe Williams's article on top vs. bottom-end supermarket salaries is interesting and full of good intentions, but I fear it doesn't lead us anywhere useful.

Her argument is that supermarkets don't pay their staff a proper wage (perhaps because of in-work state benefits), which allows them to make excessive profits and pay their CEOs an exorbitant salary. To these CEOs she cries out, "To grab so much in excess of what you could ever spend or need, at a cost of so much hardship, to so many people, defies comprehension."

She also gives us lots of handy numbers: the supermarkets' workforce is 900,000-strong, and the CEOs' salaries are as follows:

• Justin King, the CEO of Sainsbury's, receives £3.2m a year;
• Philip Clarke of Tesco, £6.9m;
• Dalton Philips, of Morrisons, £4m;
• Andy Clarke of Asda's pay is not in the public domain.

I'll be generous and assume that Clarke earns as much as the 'market leader', i.e. the Tesco CEO salary of £6.9m. That gives us a total CEO salaries of the big four supermarkets of £21m.

Redistributing that CEO income equally amongst the full supermarket workforce would give each supermarket employee just £23 extra per year. While I don't dispute that Every Little Helps, I'm unconvinced that less than 50p per week would make a significant difference to the lives of ordinary shop-floor workers.

There are serious inequalities in our society which need tackling, but all this focus on people's incomes distracts us from the real source of systemic unfairness - inequality of wealth.

Meanwhile, if we are to aim for high levels of social mobility, then while education and equal opportunities are vital, they are only enablers to the only way social mobility is ultimately achieved - income.