IKEA leads way as living wage retailer

From April 2016, Sweden’s flat-pack supremo is to become the first national retailer to pay its staff the living wage, joining the ranks of 1,600 forward-thinking employers across the UK, including Nestle, Nationwide and British Gas, who are collectively putting an extra £210 million more than the legal minimum directly into the pockets of some of the UK’s lowest paid workers.

IKEA, who earned over £1.4 billion in UK sales in 2013-14, will soon be investing more of its sizeable profit in its people, bringing minimum pay for more than 4,500 employees up to at least £7.85 an hour nationwide, and £9.15 at London stores. (For comparison, the current National Minimum Wage for over-21s is £6.50.)

The campaign for a living wage was started in 2001 in London’s East End by parents struggling to make ends meet, and rates are calculated and set by the Living Wage Foundation to reflect the realistic minimum needed for a decent standard of living in Britain today.

Usdaw, the recognised trade union for IKEA staff, will be working closely with IKEA in the months ahead to work out how the new policy will be implemented. And as far as the wider union movement is concerned, IKEA’s move clearly demonstrates that dealing with low pay in major companies is achievable.

From the corporate perspective, IKEA boss Gillian Drakeford says simply: “It makes good business sense.” We hope that other retail businesses will follow IKEA’s lead and soon be seeing sense too.