Axa and Scottish Widows, among other major investors, are supporting shareholder resolutions calling for UK stores Next, Marks & Spencer (M&S), and JD Sports to pay thousands of employees more. Managing assets worth more than £1 trillion, over 100 people and eight institutional investors are helping to drive these businesses towards paying a “real living wage.” The actual pay is meant to be sufficient for covering basic home costs.
Tracked by the Living Wage Foundation, almost a quarter of UK retail workers—roughly 818,000 individuals—are not earning this wage currently. Comparatively, the statutory minimum wage, which is slated to rise by 6.7% to £12.21 from next month, is £13.85 per hour, and across the rest of the UK, it is £12.60. Many workers find it more and more difficult to make ends meet as the cost of living keeps rising, especially in metropolitan areas where living expenses are far higher.
What Issues Investors and Campaigners Share?
Low wages affect workers and the economy, according to Catherine Howarth, Chief Executive of campaign organisation ShareAction, which is organising the effort.
“The UK’s biggest retailers are failing to support their workers with a real living wage, leaving hundreds of thousands of people in the sector struggling to make ends meet,” Howarth said.
Companies paying less than a genuine living wage, she said, add to economic instability by putting more strain on workers, their families, and the government through growing health and welfare expenditures. Inadequate pay can also result in low job satisfaction, high staff turnover, and low productivity, therefore influencing the bottom line of a business.
Workers earning less than the actual living pay are more likely to be financially insecure, which causes stress and poor mental health, according to a Living Wage Foundation study. This influences their performance at work and their capacity to contribute successfully to their workplace in turn.
What Actions Are Investors Doing?
At Next’s annual shareholder meeting on May 15, seven institutional investors—including Axa Investment Managers, Scottish Widows, Trust for London, the Greater Manchester Pension Fund, and Cardano Group—are co-filing a resolution. The resolution asks Next to produce a report on the number of employees—including contractors—who are paid less than the actual living wage. It also exhorts the business to do a cost-benefit study of using the independently certified rate as its minimum pay.
The resolution emphasises how Next’s current pay systems could run counter to its declared aim to create a fair, courteous, and inspiring workplace.
Annual meetings of JD Sports and M&S will feature similar resolutions in July. While Cardano Group is supporting the endeavour at JD Sports, Friends Provident Foundation and Scottish Widows are supporting resolutions for both businesses.
Emphasising the wider influence of these developments, Charlie Crossley, Investment Engagement Manager at Friends Provident Foundation, said: “If more big businesses committed to real living wage accreditation, it would empower thousands of workers to meet everyday costs and save for life’s critical events. It would also progress workplace equality, which is essential for preserving social cohesiveness and long-term economic stability. Significant transformation calls for industry-wide advancement. Investors are, therefore, co-filing resolutions across several firms.
Currently, how do the retailers pay their staff?
Currently paying all employees the legal minimum for those 21 years of age and above, JD Sports does not provide any further pay in highly expensive locations like London. Next pays employees over 21 the statutory minimum pay as well as some additional pay in London. M&S pays at least the real living pay to its direct staff, but it does not guarantee the same for third-party contractors as cleaners and security guards.
Some stores contend that raising wages everywhere would mean price increases on goods and services, therefore compromising their competitiveness even with the need for better salaries. Campaigners counter that paying a genuine living salary would result in lower absenteeism, better customer service, and higher employee retention rates—all of which would eventually help the businesses.
The response of retailers?
M&S defended their pay policy, stressing that, independent of age, they already satisfy the actual living pay scale for its staff. The corporation also emphasised other advantages, including a good pension and staff discounts.
A spokesman said: “We think that our outside contractors ought to compensate their staff decently as well. We welcome honest communication with every one of our shareholders, including involvement with ShareAction.
JD Sports also reacted, confirming that its UK retail employees have access to a benefits package from the first day of employment and earn more than the national living pay for individuals 21 years of age and above. Critics counter that, especially in expensive metropolitan regions, the national living salary is still inadequate for workers to cover fundamental living costs.
What wider consequences follow from a real living wage?
The argument about the actual living wages fits into a larger conversation on just compensation and corporate accountability. Many economists contend that as employees with more financial stability are more willing to reinvest in the economy, better wages can increase consumer spending.
According to research by the Institute for Public Policy Research (IPPR), paying more for salaries can result in better employee engagement and improved productivity since employees feel more appreciated in their jobs. Moreover, companies that promise to pay the actual living wage usually gain a better reputation, which increases their appeal to investors and consumers.
Retailers who oppose the genuine living wage could potentially run long-term reputational risk as public and investor pressure keeps rising. Companies that ignore fair pay issues could find it difficult to keep consumer trust and investor confidence as awareness of corporate social responsibility rises.
Where Next?
The pressure on big UK stores to adhere to the actual living pay is expected to get stronger as the shareholder meetings get near. Resolutions will hopefully bring about major changes that guarantee fair compensation for all workers, including contractors, thereby assuring that investors and campaigners remain hopeful.
The result of these resolutions could establish a standard for other sectors, proving that fair salaries are not just a moral need but also a calculated commercial move promoting long-term success.
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