In the News

Labour Market: Sainsbury's raises pay to £10 an hour

Graham Watson

8th January 2022

Sainsbury's have announced that they are going to increase the basic rate of pay to £10 per hour matching Morrisons, and the discounters Lidl and Aldi.

It will increase its basic rate from £9.50 to £10 an hour for staff across its supermarkets and Argos stores from 6 March. Grocery delivery drivers get a 12% pay rise to £11.50 per hour.

Indeed, in most cases, the discounters actually pay better, but the fact that the established players feel the need to match the discounters, highlights the competitive nature of the labour market in the sector, as well as its oligopolistic market structure.

Labour shortages continue to bite and many employers are having to raise pay not just to combat the impact of higher inflation on the real pay of their employees, but also to attract and retain the staff they need.

Some comment from the Living Wage Foundation is shown below. And we have provided a link to a revision video on efficiency wages.

Efficiency Wages I A Level and IB Economics

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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