With approximately 1 in 50 people in NZ employed by powerful retail supermarket giants, the economic and social repercussions of their employment strategies warrants closer attention. Below, I unpack how supermarkets are driving economic inequality and perpetuating borderline subsistence among their workforce and the wider economy - all the while reaping substantial profits. And that is to say nothing of the vast network of suppliers and satellite industries (growers, producers, couriers, and merchandisers to name a few) that contribute to the arrival of food and produce onto the supermarket shelves.
At the core of the issue is an overt concentration of power, held by a relatively tiny group of major players in the supermarket industry, resulting in an oligopolistic market structure.
An oligopoly is a market structure characterised by a small number of large firms that dominate an industry. In an oligopoly, these few firms hold a significant share of the market, and their actions or decisions can have a substantial impact on the market as a whole. Oligopolies can exist in any industry, including manufacturing, telecommunications, supermarkets, and retail.
Such power concentration affords these entities unparalleled influence over wages and working conditions, leading to a scenario where the majority of their employees receive remuneration close to the minimum wage. The evidence supporting this claim is unequivocal, with studies consistently revealing a significant portion of supermarket workers in New Zealand earning wages that barely exceed the bare minimum.
According to PayScale,
- a Grocery Assistant earns $18-22/hr
- a Duty Manager earns $19-25/hr
- a Retail Sales Assistant earns $18-$24/hr
The economic consequences of paying such paltry sums extend beyond the individual struggles of supermarket employees. The pervasive low-wage environment becomes a driver of economic inequality on a macroscopic scale. Repercussions are then felt across society, creating and deepening divides between those who have the means to prosper and those who find themselves caught in a cycle of financial precariousness.
Consider, for instance, the impact on families dependent on supermarket employment. Trapped in a cycle of poverty, these households face challenges ranging from limited access to education and healthcare to the constant struggle to meet basic needs. The social cost is immeasurable, as the economic disparities between the fortunate few and the struggling many manifest themselves in communities perpetually and cyclically burdened by inequality.
Contrastingly, the financial reports of these supermarket giants paint a picture of prosperity. Billions (13+ in Foodstuffs' case) in sales. Profits arrive, dividends are distributed, yet the benefits seldom reach those whose labour sustains them. The incongruity between the wealth amassed by a select few and the financial struggles of the majority of their employees raises ethical questions about the prevailing economic model.
For essential services like supermarkets or banking, we rely on competition to keep prices low. Without competition, New Zealanders don't have options to shop elsewhere, allowing markets to distort prices resulting in high prices and mediocre services for consumers
The influence of the supermarket cartel extends beyond the economic realm and permeates into the political arena too. The economic power consolidated by these actors translates into formidable lobbying capabilities, allowing them to shape policies that prioritise their interests over the welfare of employees and the net benefit they ought to be delivering in service of feeding a nation.
Unlike many countries, New Zealand does not require lobbyists to register, disclose their clients or funding sources, or adhere to ethical standards.
This further entrenches the cycle of economic inequality, as legislative frameworks designed to protect workers' rights are influenced by the powerful few.
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The oligopolistic behaviour of New Zealand supermarkets is not merely an economic concern; it is a societal challenge demanding immediate attention. As responsible citizens, it behoves us all to scrutinise and challenge the ethical dimensions of a system that perpetuates poverty, while a select few enjoy unprecedented profits. Is it time for collective action? To call for fair wages, just working conditions, and a re-evaluation of economic structures that contribute to the pervasive inequality we witness today?
The strength of our nation lies in the well-being of all its citizens, not just a privileged few who currently reap the benefits of a plainly unjust system. What do you think?
