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The Guardian view on Sports Direct: a bad business The Guardian view on Sports Direct: a bad business
(about 17 hours later)
Cogs in the machine would be the cliche, but that really doesn’t capture the disdain of Sports Direct towards its workers. The staff, who sometimes arrive on day one clutching letters from employment agencies about just how readily they can be sacked, would better be described as disposable kit. Cogs in the machine would be the cliche, but that really doesn’t capture the disdain of Sports Direct towards its workers. The staff, who sometimes arrive on day one clutching letters from employment agencies about just how readily they can be sacked, would better be described as disposable kit.
Some in blue jackets marshall the movements of others in yellow jackets around a Derbyshire warehouse, and neither caste is allowed to wear any of the brands sold by the firm – because it doesn’t trust the staff not to steal. Slipping inside this panoptican, the Guardian uncovered a surveillance culture, with sticklerish clocking-in, intrusive searches and a disciplinary system where an unduly long trip to the loo can earn one of the black marks that tot up to dismissal. The dead time involved in turning out pockets, plus penalties for minor lateness, drags effective pay below the minimum wage. If staff are pushed to the point where stealing can become a temptation, then there are going to be costs in policing the risk. The staff end up shouldering some of these. Some in blue jackets marshal the movements of others in yellow jackets around a Derbyshire warehouse, and neither caste is allowed to wear any of the brands sold by the firm – because it doesn’t trust the staff not to steal. Slipping inside this panoptican, the Guardian uncovered a surveillance culture, with sticklerish clocking-in, intrusive searches and a disciplinary system where an unduly long trip to the loo can earn one of the black marks that tot up to dismissal. The dead time involved in turning out pockets, plus penalties for minor lateness, drags effective pay below the minimum wage. If staff are pushed to the point where stealing can become a temptation, then there are going to be costs in policing the risk. The staff end up shouldering some of these.
What goes on in the Sports Direct empire – under the rule of billionaire business emperor, Mike Ashley – is important in its own right. But it is important as a symbol, too, shedding an unflattering and wider light on the British way of doing business. Even after the complaints about working conditions and mediocre results combined to send shares tanking 13% on Thursday, this remains a colossus of retail – a thriving division of UK PLC. But unlike in, say, an Amazon warehouse, there is little sign of automation among the human swarm. The conscious strategy would seem to be to rely on cheap labour rather than costly investment in robots or other technology. While that strategy might well make commercial sense for an individual company for as long as the rules of the game allow it, a pile-’em-high, pay-’em-low approach to the workforce can never be a route to prosperity for the economy as a whole. What goes on in the Sports Direct empire – under the rule of billionaire business emperor, Mike Ashley – is important in its own right. But it is important as a symbol, too, shedding an unflattering and wider light on the British way of doing business. Even after the complaints about working conditions and mediocre results combined to send shares tanking 13% on Thursday, this remains a colossus of retail – a thriving division of UK PLC. But unlike in, say, an Amazon warehouse, there is little sign of automation among the human swarm. The conscious strategy would seem to be to rely on cheap labour rather than costly investment in robots or other technology. While that strategy might well make commercial sense for an individual company for as long as the rules of the game allow it, a pile-’em-high, pay-’em-low approach to the workforce can never be a route to prosperity for the economy as a whole.
Over the protracted course of the current recovery, economists have continually scratched their heads in anguish about Britain’s “productivity puzzle”. What workers are able to produce in an hour collapsed during the slump, and ever since the figures, which used to march to a steady beat of progress, have stubbornly failed to recover. Even today, overall productivity remains lower than in 2008. A peek inside a warehouse awash with abundant labour, and where – in the words of the Guardian’s undercover reporters – “the most cutting-edge piece of technology on display is a ballpoint pen” and the analytical solution to this productivity puzzle begins to suggest itself.Over the protracted course of the current recovery, economists have continually scratched their heads in anguish about Britain’s “productivity puzzle”. What workers are able to produce in an hour collapsed during the slump, and ever since the figures, which used to march to a steady beat of progress, have stubbornly failed to recover. Even today, overall productivity remains lower than in 2008. A peek inside a warehouse awash with abundant labour, and where – in the words of the Guardian’s undercover reporters – “the most cutting-edge piece of technology on display is a ballpoint pen” and the analytical solution to this productivity puzzle begins to suggest itself.
Finding the right policy solution will not be so easy. The coming rise in the minimum wage is a useful start. By raising the costs of hiring cheap labour it could tilt the scales in favour of a higher-investment, higher-pay approach. It is, however, a shame that the prospective gains for the most pinched workers will be snatched back by the means-testing of benefits and universal credit cuts. It may be possible to reduce reliance on such wage top-ups in future, but the Sports Direct economy obviously needs to be reformed before such savings can be banked. As well as a higher – and better-enforced – minimum wage, there needs to be greater protection for agency staff, obligations on employers who recruit overseas to ensure that foreign workers understand their UK employment rights, and restrictions on zero-hours working. Only once it becomes impossible for employers to turn labour on and off like a tap will they respect its value and make investments to save on sweat.Finding the right policy solution will not be so easy. The coming rise in the minimum wage is a useful start. By raising the costs of hiring cheap labour it could tilt the scales in favour of a higher-investment, higher-pay approach. It is, however, a shame that the prospective gains for the most pinched workers will be snatched back by the means-testing of benefits and universal credit cuts. It may be possible to reduce reliance on such wage top-ups in future, but the Sports Direct economy obviously needs to be reformed before such savings can be banked. As well as a higher – and better-enforced – minimum wage, there needs to be greater protection for agency staff, obligations on employers who recruit overseas to ensure that foreign workers understand their UK employment rights, and restrictions on zero-hours working. Only once it becomes impossible for employers to turn labour on and off like a tap will they respect its value and make investments to save on sweat.
The change required will not be easy, but it is not one that can be ducked. The mix of burgeoning business rewards at the top and low pay at the bottom is sorely squeezing the middle, on which social stability used to rest. It’s for the sake not just of the British economy, but also for the sake of British community life and even British democracy, that the country must wrestle with fables such as the tale of Sports Direct. The change required will not be easy, but it is not one that can be ducked. The mix of burgeoning business rewards at the top and low pay at the bottom is sorely squeezing the middle, on which social stability used to rest. It’s for the sake not just of the British economy, but also for the sake of British community life and even British democracy, that the country must wrestle with fables such as the tale of Sports Direct.