Thousands of low-paid retail workers are getting stuck, not getting on

The news that supermarket giants Asda and Sainsbury’s are planning to merge has put the spotlight firmly back onto Britain’s retail sector and those who work within it.

Together the two supermarket chains employ more than 300,000 people – equivalent to the population of Nottingham – so the merger will impact upon thousands of UK workers and their families.

The companies have said there will be no job losses, but given Sainsbury’s plans to slash some prices by up to 10% it is little wonder that the GMB has raised concerns over long-term job security, pay and changes to terms and conditions. Unite has also called for staff guarantees and Labour’s Rebecca Long-Bailey has spoken out about the knock-on effects for employees.

All this comes as a new Fabian Society report commissioned by the TUC reveals that retail is the worst industry in the UK for pay and progression.

Our Pathways to Progression report considered whether low-paid employees in 2001-2004 were still in the same situation a decade later. We found that two in five (42%) of those who were working in retail at the end of the 10-year period were still stuck in low-paid work. This is twice as bad as the economy as a whole, where only one in five workers remained in low-paid work a decade later.

The situation is especially bad for young workers. Our report found that most low-paid workers in their late-teens manage to escape low pay by their late-twenties, but this is far less likely for young adults working in retail. More than a quarter (27%) of retail employees aged under 30 who were in low-paid work in 2001-2004 were in the same situation in 2014-16 compared to only 1 in 10 across the economy as a whole.

The report also estimates that just over half a million workers aged between 18 and 29 are currently working in low-paid retail work.

Median pay for young workers in the sector is £8.42 an hour – lower than the median wage across the economy for workers in this age group (£9.88) and substantially lower than the median pay for the population as a whole (£12.18).

Improving progression in the retail sector is not only in the interests of young workers, but also benefits employers and society. The retail industry makes a vast contribution to the UK economy: the sector provides one in eight jobs; accounts for over 10% of the country’s economic output; and is a vital source of part-time, flexible jobs in every community.

With in-work poverty on the rise, it’s time for the retail sector to join with government and trade unions to develop an industrial strategy ‘sector deal’ with good jobs at its heart.

The Fabian research also found that retailers are starting to take talent strategy more seriously as labour shortages grow and migration policy shifts following Brexit. On the other hand, many have also been reducing the number of supervisory roles, which reduces scope for career progression.

At firm-level, employers need to learn from the practice being developed by their peers to encourage progression, including flexible working initiatives, trial promotions, and better job design. If progression opportunities appear attractive and if employers encourage people to put themselves forward, career advancement is much more likely.

Collectively the retail sector must come together to work with government and unions to deliver more good jobs, particularly at a time when the sector and individual firms are going through major change. Retailers can also respond to the development of the new apprenticeship regime to develop in-work qualifications and opportunities that lead to great careers in individual firms and across the sector.

Finally, the government must show leadership by setting a policy framework that is conducive to good jobs and progression. It must ensure that the social security and skills system encourages progression, improve the pay, conditions and job security of entry-level jobs to give employers reason to invest in their people, and provide support and investment to help retailers test and adopt innovations that lead to better work.

Working together, the government, employers and unions can ensure that retail is a sector where young workers come to get on, not get stuck.