News - 07.03.2017 klo 09.00

PAM report: The retail sector can afford to pay wages – society is picking up the bill for their employees’ incomes

A report by Service Union United PAM reveals that the retail sector is getting its employees’ livelihoods paid for by society. Employees in the retail sector are underpaid, and their incomes are topped up with social subsidies funded from tax revenue to the tune of 30 million euros each year.

A study produced for Service Union United PAM by Niina Tanner looked at the financial impact on taxpayers of working income poverty.  In her report Tanner makes clear the extent to which Finland pays various social transfers to make up the income trap caused by low pay.

– Recently there have been frequent public demands for an increase in low-paid work. Workers in the retail sector are paid social benefits such as housing and income support amounting to an estimated 30 million euros a year, Tanner states.

– At the same time retailers are making total net profits of 334 million euros. This goes to show that the low wages in the sector are boosting retailers’ profits, but are putting pressure on taxpayers because of the social benefits paid out, Tanner says.

The study shows that there is no economic imperative for companies to pay their workers low wages. Retailers’ profits could have paid all the social transfers topping up employees’ incomes in the sector ten times over.

– The social transfers paid to retail employees in the form of various social benefits could just as well be paid directly to workers as wages. They wouldn’t take up even one tenth of the profits going to the owners, Tanner says.

The working poor are a worldwide phenomenon. For example, half (52%) of the households of workers in fast food outlets in the US rely on public income-support programmes. These cost an estimated 7 billion dollars a year.

In Tanner’s opinion, the phenomenon is also clearly visible in Finland. She says that refusing to pay reasonable remuneration for work causes poverty and deprivation and to some extent transfers employers’ payroll burden to taxpayers.

– It’s more about fair distribution of operating profits, or in this case the lack of it. If a company’s finances are on a stable footing, it is simply wrong to justify low wages as being financially unsustainable, Tanner states.

The publishing event to launch the report by Service Union United PAM and Niina Tanner was held on 7 March 2017. Click here  to view the report (in Finnish).

 

 

A study produced for Service Union United PAM by Niina Tanner looked at the financial impact on taxpayers of working income poverty.  In her report Tanner makes clear the extent to which Finland pays various social transfers to make up the income trap caused by low pay.

– Recently there have been frequent public demands for an increase in low-paid work. Workers in the retail sector are paid social benefits such as housing and income support amounting to an estimated 30 million euros a year, Tanner states.

– At the same time retailers are making total net profits of 334 million euros. This goes to show that the low wages in the sector are boosting retailers’ profits, but are putting pressure on taxpayers because of the social benefits paid out, Tanner says.

The study shows that there is no economic imperative for companies to pay their workers low wages. Retailers’ profits could have paid all the social transfers topping up employees’ incomes in the sector ten times over.

– The social transfers paid to retail employees in the form of various social benefits could just as well be paid directly to workers as wages. They wouldn’t take up even one tenth of the profits going to the owners, Tanner says.

The working poor are a worldwide phenomenon. For example, half (52%) of the households of workers in fast food outlets in the US rely on public income-support programmes. These cost an estimated 7 billion dollars a year.

In Tanner’s opinion, the phenomenon is also clearly visible in Finland. She says that refusing to pay reasonable remuneration for work causes poverty and deprivation and to some extent transfers employers’ payroll burden to taxpayers.

– It’s more about fair distribution of operating profits, or in this case the lack of it. If a company’s finances are on a stable footing, it is simply wrong to justify low wages as being financially unsustainable, Tanner states.

The publishing event to launch the report by Service Union United PAM and Niina Tanner was held on 7 March 2017. Click here  to view the report (in Finnish).

 

 

 

 

 

 

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