What do remainers think of this!

[Corcory]

6 MPs, members of the commons select committee, paid a visit to Sports Direct's warehouse in Derbyshire the other day.
It is build in an ex mining area specifically to provide work for a community badly needing employment opportunities.
When the MPs were shown around the warehouse they had the opportunity to speak to many of the employees there. None of them were British all of them were Eastern European. Some didn't even speak English. So could easily be duped into taking reduced wages and a reduction in their employment rights! No unions are allowed there.
The taxi driver who took the MPs there told them there are never any jobs advertised around here from the warehouse and that people from the area would love jobs there - well provided the paid the proper wages and gave full employment rights!

Fawful - I don't get what your talking about!

I really don't think we need cheap unskilled labour from other countries when we can employ people from here.

Do you genuinely believe that there are hordes of unemployed British people just clawing at the door to be given these jobs?

Sapphire, I know there aren't 'hordes of unemployed British people just clawing at the door to be given these jobs'.
What I would hope would happen would be that the likes of Sports Direct would have to work harder at attracting employees and would have to improve working conditions and wages so increasing the likelihood of people taking on the jobs.
I, for one would be prepared to pay a few pence more for our sports direct cheap goods in order that they pay a decent wage to their staff.

Sapphire, I know there aren't 'hordes of unemployed British people just clawing at the door to be given these jobs'.
What I would hope would happen would be that the likes of Sports Direct would have to work harder at attracting employees and would have to improve working conditions and wages so increasing the likelihood of people taking on the jobs.
I, for one would be prepared to pay a few pence more for our sports direct cheap goods in order that they pay a decent wage to their staff.

What does this have to do with Brexit?

Did things really improve whilst we've been in the EU? We now have zero hours contracts, wages that have barely risen in ten years, unpaid internships, etc. Is that supposed to be progress?

It's got to do with FOM. If we stop having loads of unskilled workers or other workers coming in that we don't really need then the employers should need to improve conditions of employment and wages in order to encourage British people to take up the jobs.

Concory, the referendum was on whether to leave the EU or not. FOM was not mentioned on my vote slip. There was/is no evidence that FOM rules will change, indeed, many 'top' leave voters were, and are, pro FOM.

then the employers should need to improve conditions of employment and wages in order to encourage British people to take up the jobs.

What makes you think employers would? Why do you think workers banded together in Trade Unions?

What I would hope would happen would be that the likes of Sports Direct would have to work harder at attracting employees and would have to improve working conditions and wages so increasing the likelihood of people taking on the jobs.

Well, one can always hope.

But, genuinely, do you think they would? When you bear in mind that the purpose of a commercial company is to make the maximum possible profits for its shareholders?

When you bear in mind that the purpose of a commercial company is to make the maximum possible profits for its shareholders?

And this is taught in school when ? And to what level ?

This is a serious point. The level of naivete the average person in the street displays regarding commerce in general is shocking. Hence the rather sad hullabaloo made over the Cadbury sale. These are people who clearly do not understand how companies work (and have always worked).

That said, it's probably in someones interest somewhere that the general public are ignorant of such things (cf. the UK constitution). Well informef plebs can be a pain to shepherd govern.

Many years ago, working for myself, I was in a position to sell a second hand component (cost price new: £100) to a customer who walked in off the street. After locating the item, checking in the documentation (this was pre internet so paper based) it was the right one, I looked at it, and decided £10 was a fair price. The component was perfectly functional , but oily, and I was in a good mood.

When I mentioned the price, the customer almost had an apoplectic fit, and started ranting about - and I quote:

You're just trying to make money from people !

With a growing sense of trepidation, I asked what price he wanted to pay, and got the equally "amusing" answer:

well, seeing as it's used, I thought it would be free

If this were an isolated incident, I would put it down to the individual. But I am sure there are many people reading this who agree with me that this was a recurring theme in "the public". A complete ignorance of how commerce works.

Well Peregrina, the one thing I do know about is business! Degree in it, 30 years retail management experience and 17 years of helping run our own family business. How ever when you cut off the cheap supply of labour and the businesses find it difficult to attract workers they have to change their methods. I am also hopeful that the government will change things with regard to zero hours contracts, self employed 'contracts' and the use of casual agency staff to get round the empl0yment regulations.

Corcory, I am sure you do know a lot more about retail than I do. However, in a lot of areas there are not many immigrants. I am not aware of all that many in Shirebrook, where Sports Direct is. What will still be available is cheap, British born labour because the mines have closed and with them have gone the supporting industries. I can't see that changing, unless there is a deliberate drive to create work in those areas. Alternatively if younger people migrate en masse elsewhere, Sports Direct would also relocate.

Twenty to thirty years ago there was a big push to move civil service posts away from the South East, because recruitment and retention was a problem there, to areas of high unemployment to get round this. Since then the Government has been severely cutting back on the Civil Service.

Corcory If you have business experience then you have experience of business models. I have 30 years experience in a business to business service industry, The business model on which we based our marketing strategy included developing a professional workforce on fair wages that would present a professional face to the end customer on behalf of our customers. The issue with that model is that our customers needed to have high margins, i.e. in retail terms, not Primark.

However there are an increasing number of Primarks in the economy exploiting the segments of the market that want quantity over quality and low prices, in retail of course that is on the back of cheaper labour costs in the developing world, in the manufacturing industries like Textiles that Maggie made the decision to abandon because they would not be able to compete with those emerging economies.

So my former employer is now in a much more competitive market where many new business models have crept into the mix that enable businesses to offer a more cost effective solution to their customers needs, models that encompass franchising, agency labour etc. On the face of it this is a bad development for workers. Except that partly as a result, the business models have enabled their customers to have a more competitive proposition and so their sales have increased, and the industry has expanded with it.

It is not an issue of those businesses matching the HR policies that underpin the professionalism that is my old companies unique selling point (along with enabling us to recruit the best workers) if they did their businesses would not be economic and they would go out of business along with many of their customers, and they would not employ anyone, and there would be a big loss to the economy.

Sports Direct are sharks, there are always going to be sharks in business and it is right that they are now forced to conform to the law and good business practise, that is why they exist.

However I am afraid that the world does not owe U.K. workers a living. UK industries do have to be competitive and whilst the economy is correctly focused on industries where we can add value through our skills and scientific and technological know how (at least as long as we are part of the single market) the fact remains that some business models will only survive and generate employment if they have access to a more flexible labour force.

I would add that many of these business models originate in America where workers have fewer rights, the values you see in companies like Amazon, Uber, Sports Direct are exactly the values that will underpin any future trade agreement with the US.....

I'm sorry Peregrina, I had meant my comments to be directed at Sapphire.
Suffice to say the point of the thread was that Sports Direct's warehouse in Shirebrook employs 3000 people, most of which are Eastern European so much so that locally it is known as the Gulag and that you can't get a job there unless you speak Polish! That's what I feel should change. I really don't think there is any need for us to have workers from other countries coming doing unskilled jobs when we really don't have a need for them and they are only propping up an unscrupulous employer in order to sell us cheap sports gear.
Whatwouldrondo - So if that business model isn't sustainable then so be it. But we don't have to put up with the likes of them exploiting workers to give us cheap goods.

locally it is known as the Gulag and that you can't get a job there unless you speak Polish!

Anecdata, anecdata, anecdata.

What do you think of ron's remarks about US business models/employment practices, especially in light of May and Johnson's seeming determination to suck up to Trump and to prioritise trade relations with the US over the EU?

Sapphire - Of course if the Tories had been able to ask all employers what proportion of their workers were from overseas then we would know wouldn't we!! Not that I agree with the idea.

I don't see any 'sucking up' to Trump. He is going to be president of the USA so we have to speak to him.
I also don't think they are 'prioritising' the US over the EU. They can't negotiate with the EU until A50 is enacted so there's no harm in them talking to anyone else in the mean time.

Corcory As I highlighted Sports Direct are sharks who have rightly been bought to account. That scale of ruthlessness in business practises does tend to catch up with companies here, it is not good for their brand although some homegrown companies focused on UK markets like Lord Wolfsons GUS notoriously got away with it for decades long before the arrival of EU migrants. It is nothing new, however the influence of US values is and that will only increase with a closer trading relationship.

However if our industries are uncompetitive because of labour costs the economy shrinks, there are fewer jobs, less money for the NHS, fewer doctors. Quite rightly we are trying to focus on industries that do employed skilled labour at better salaries (though they are at risk from the brain drain /a potential hard Brexit) but companies that seek flexible working practises that enable them to deliver jobs and growth with alternative competitive business model are not necessarily shits. Indeed they are the SMEs (Small and medium enterprises ) that underpin the economy.

Corcory, You don't agree with asking all employers what proportion of their workers were from overseas, but you seem very quick to believe and repeat anecdotal 'evidence' that you can't get a job in this place unless you speak Polish.

As for Trump, compare and contrast Theresa May's message of congratulation and Angela Merkel's.

Warehousing isn't an 'industry' that will be shrinking any time soon. As more and more of us buy on line 'that business model' will continue.
We will continue to purchase the likes of clothing from the far east made as cheaply as possible, increasing trade with the US won't change that.
Sapphire I was quoting the local MP who brought this all up to Parliament which in turn initiated the select committee enquiry into work practices at Sports Direct.
As for Trump. I agree that Angela Merkel made a very good statement but May will have to negotiate a decent trade deal with the US as one of main markets. Germany I think, will be able to be a bit more circumspect.

Corcory The online shopping business model is absolutely dependent on cheap warehousing and distribution costs, if all those goods cost more to store, pick and get to the end consumer, already in the majority of cases , as with retail, a greater part of the cost base than the manufacturing, than they can sell them for to the consumer they will go out of business. It isn't just the warehouse, have you not noticed that the people who bring these things to your door are rarely the same face twice, agency drivers, even if they are in Parcelforce branded vans or if they are they the same face it is because they are a self employed franchisee operating in their own car? The distribution industry is absolutely cut throat because the margins, and the effect on their customers margins, is such an important part of their mutual business model. It isn't any coincidence that so many of these practises are coming to light in the warehousing and distribution industry, and actually was ever thus, GUS was a mail order company and its poor employment practises were in its warehouses and delivery networks, and it did go out of business because new online retailers like Amazon target more profitable customer segments and used technology and new business models to manage their warehousing and distribution costs even more effectively.

The tread to online shopping will continue as people appreciate the convenience of it. The main model that we can compare it to is the retail one where there are considerably increased costs of running retail outlets. Cutting that part out of the supply chain has significant reductions in cost as it is. All large retailers also have warehousing and distribution to run at considerable cost and they are still surviving. I feel we would see the demise of the retail shop before we see the demise of online businesses selling similar goods.

Corcory I was not arguing that all online shopping could go under, clearly there are some business that have higher margins (but that tends to be on lower volumes ) because they target more affluent consumers. However a pile it up high and sell it cheap business strategy needs a low cost base. It is what Lord Sugar blags on about all the time. It is a business model that can work but it is a harder slog. If you were to say stop now to the common working practises in the industry, use of agency staff, franchising etc. that you presumably regard as unacceptable, not the things Sports Direct have been called out on, then costs would increase and some players would be unable to compete and the growth in the online shopping industry might well decline.

It is in fact regarded by industry analysts as a mature industry sector now, in the UK and the US, and that tends to be associated with an increase in competitive pressures and an downward pressure on costs.

I won't even start on the High Street and the competitive advantages of having both actual and virtual faces to the consumer with the benefits of economies of scale with common distribution and warehousing. We could be here all day.

However the point is that as I say nobody owes any of us a living either in UK or overseas markets and rising labour costs will lead to a smaller economy .

My crystal ball gazing tells me there is a future for these pop-up shops, to fill the gap between online and real life.

Extrapolating, that will require a complete shift in landlord attitudes (stop trying to lock people into long leases for a start) as well as a less rapacious attitude to rent (the old paradox of how to entice new business with lower rents while trying to justify charging existing leaseholders much higher amounts).

Then a revolution in the insurance market (short-term policies) - with the understanding that insurers are generally stuck in the 19th century.

And finally a support industry that can deliver - shopfitters, designers, building trades (particularly carpentry and electricians, plus network engineers).

Oh, and a business rates system and tax system that can manage all of these things.

Putting it like that, we can see what's holding back entrepreneurs - it's "the system". The UK system that is.

I'm not sure you could say that GUS 'went out of business', any more than say Cadburys or EE have gone out of business. Their home shopping and delivery business was sold to their largest competitor for £600m and the two businesses were combined.