Milking the recession

Profitable companies are using the current economic crisis to weaken terms and conditions of employment and drive down wages of some of the countries lowest paid workers according to a new report published by Mandate.

'Milking The Recession', launched by the retail sector trade union earlier this month claims that there is "an aggressive and determined" drive by companies to roll back the modest gains made by workers in recent years.

Mandate claim that there is a strategy being deployed by major retail companies to undermine wages. The strategy includes four main objectives. It calls for the reduction of allowances paid for working on Sundays, public holidays and anti-social hours and the offer of redundancy packages to long serving workers and replacing them with new and cheaper workers.  

It also aims to reduce working hours to the contractual minimum irrespective of the impact on the minimum pay increases for significant reductions in employment standards.

In 2008 a retail worker in Dublin earned on average €22,721 a year, €11,000 less than the average industrial wage of €34,000 a year.  The wages in Cork, Galway and Limerick were lower, averaging at €17,500 a year.

At the start of their career a retail worker can expect to earn €9.90 an hour. After 10 years in employment the same worker can expect to earn €13.57 an hour.

While retail workers are among the lowest paid in the labour market, the retail sector was one of the principle beneficiaries of the boom. Between 2001 and 2007 the value of retail sales increased by 34 per cent and the volume of retail sales increased by 32 per cent.

While the retail sector has been hit by a significant drop in sales in the last twelve months, figures from the Central Statistics Office (CSO) indicate that the fall has not been evenly spread.

At the end of 2009 CSO figures indicated that the volume of retail sales had dropped by nine per cent compared to 2008. However sales in the pharmaceutical and cosmetics sector had fallen by only two per cent while sales in the non-specialised sector, which includes supermarkets, fell by 3.4 per cent. The overall figure for the retail sector is skewed by a dramatic decline in specific areas such as the motor trade (down 25 per cent) and electrical goods (down 11 per cent).

Mandate acknowledges that many companies are "genuinely struggling in the current market conditions" and says that "its members will not be found wanting and will play a constructive role in restructuring" to save jobs.

However they also claim that, "there are an increasing number of companies who, despite remaining profitable and enjoying good trading figures, are attempting to force workers to take unnecessary and unfair reductions in pay, allowances and terms and conditions".

In response Mandate is demanding "fairness in the retail sector" as "low paid workers who benefitted little from the so-called boom years cannot now be expected to bear the brunt of cutbacks."