Kroger is closing two stores in California rather than pay grocery workers an extra four dollars an hour for working at the nation’s largest supermarket chain during the coronavirus pandemic. The company blamed a decision by local officials who recently approved a temporary wage increase for some supermarket employees.
Kroger said it will close the stores, a Ralphs and a Food 4 Less, in April because of the law, passed in January by the Long Beach city council. With a handful of cities across California weighing whether to mandate “hazard pay” for grocery workers, Kroger also warned that it could shut more stores.
Long Beach last month became the first city in California to approve a hazard pay ordinance, with the law requiring grocery stores with at least 300 workers nationwide and more than 15 employees within Long Beach to pay an extra $4 an hour for a 120-day period.
Research has found that front-line employees face higher risks of coronavirus exposure at work. Such workers are also more likely to be Black, Hispanic or Native American, populations that have suffered higher rates of COVID-19.
Kroger called the city’s decision to hike emergency pay “misguided.”
“As a result of the City of Long Beach’s decision to pass an ordinance mandating extra pay for grocery workers, we have made the difficult decision to permanently close long-struggling store locations in Long Beach,” the company said in a statement to a CBS affiliate KCAL9. “This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city.”
The California Grocers Association also has filed a lawsuit against the city, claiming the ordinance is unconstitutional because it skirts a collective bargaining agreement between supermarket companies and unionized workers.
“Extra pay mandates will have severe unintended consequences on not only grocers, but on their workers and their customers,” said Ron Fong, the trade group’s president and CEO, said in a statement to CBS MoneyWatch.
“A 28% increase in labor costs is huge. Grocers will not be able to absorb those costs, and negative repercussions are unavoidable,” added Fong, citing a study commissioned by the trade group.
“Outrageous conduct”
Long Beach officials contend courts have upheld similar wage increases. Long Beach Mayor Robert Garcia in a tweet vowed a vigorous defense in court.
The United Food and Commercial Workers, a union that represents 1.3 million workers including 55,000 at Kroger, criticized the grocery’s decisions.
“City leaders stepped up to take care of these essential grocery workers and ensure they receive hazard pay for the danger they face. Kroger closing these stores is truly outrageous conduct and a ruthless attempt to create a chilling effect that will discourage other cities from doing what is right and enacting hazard pay mandates that recognize the threat these workers face from COVID-19,” UFCW International President Marc Perrone said in a statement.
The issue is likely to persist, especially in California. The Montebello City Council last week approved a requirement that large drug and grocery stores pay employees an extra $4 an hour for 180 days, and Pomona expects to consider a similar ordinance by March 1. The Los Angeles City Council is set to consider a similar measure on Tuesday.
More store closures?
Kroger signaled it could shut down additional stores in cities that adopt hazard pay requirements. “These misguided mandates could put any struggling store in jeopardy of closure,” a spokesperson for Ralphs told the Mercury News.
Kroger in May ended what it called “hero pay,” a $2 an hour bonus offered to its more than 500,000 workers starting in April. Instead, the company switched to paying $130 million in bonuses, with full-time workers getting $400 for and part-timers receiving $200.
Kroger at one point asked quarantined workers on COVID-19 emergency leave to return what it called “overpayments,” demanding that workers repay the extra cash or face bill collectors. The company rescinded its demand after an outcry.
Kroger has tallied record earnings as the pandemic has encouraged more Americans to at home, boosting food and other grocery sales. The company recorded more than $2.9 billion in operating profits through the third quarter of 2020, taking in an extra $1.2 billion in earnings compared with a year earlier.
Kroger is redirecting some of that money to investors, with a $1 billion in stock repurchase announced in September. On Friday, the company announced a $147 million dividend payment and said it expects to increase its dividend over time.
Another major grocery chain, Trader Joe’s, said Tuesday that it will temporarily raise hazard pay for all of its hourly workers across the U.S. by an additional $2 an hour starting in February. The pay hike, which will raise hazard pay for Trader Joe’s workers to $4 an hour, follows a mandate passed last week by the Seattle City Council.
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“Research has found that front-line employees face higher risks of coronavirus exposure at work. Such workers are also more likely to be Black, Hispanic or Native American, populations that have suffered higher rates of COVID-19”. Communist California, driving more businesses out and of course playing the black skinned, brown skinned race card. Yep, it is the white man’s fault, for the higher incidence of corona virus, among black and brown skinned people. I am sure if all of us whites are exterminated from the Earth, covid will no longer attack black and brown skinned people, will it, liberal communists? Oh, and by the way, how can any people of color suffer from the coronavirus at all, since they are all wearing masks, per Dr. Fauci’s recommedations?
Most of the Krogers I’ve gone into, there’s roughly even amounts of WHITES and other races.. SO where are they getting the Bull, that “its gonna impact minorities more”???
Why not demand double time? It’s not the city council’s money, so it doesn’t cost them anything.
They are most likely shocked to hear that “negative repercussions are unavoidable”.
“City leaders stepped up to take care of these essential grocery workers…”
Again, it’s not their money. They generate none of the income and pay none of the wages. Not such a “big step” at all. First you steal the money (legally) then you dole out a few pennies to ease the misery you’ve caused and you’re back on the fast track to re-election and the right side of herstory.
Like always, DEMS ARE FREE when giving away OTHER people’s money.
oooohhh… I’m scared mommy…
Raise my allowance…..
I’m not a fan of the commie leaning kroger, but I’m even less of a fan of governments that STOMP ON THE RIGHTS OF CITIZENS AND COMPANIES!
EVERY CHAIN should close their stores Immediately and tell the customers to VOTE WITH INTELLIGENCE NEXT TIME!
Good for Krogers and I hope other business stand up and do the same thing. Though be careful as tis may be what the lib’s want. Bread lines in our future. Go get ’em, California Grocers Association.
The Lib governments have socialist farm communes all set up to go when the farms and grocery stores all go bust in their government power grabs.The grocery stores who can’t make a profit on government forced wages (By the way are illegal), the farms when there is no gas to run thier combines and harvesters to bring in the harvest. Californians deserve all the failure they have voted for. The law of diminishiung returns always follows the lawlessness of diminished socialist minds.
Like South Africa who used to be the breadbasket of Africa before they ran out those nasty white people, California whose Jaoquin Valley used to be the produce garden of America,,,,,thanks to the skin color obsessed Democrats now cannot even feed the state,,,,and for the same reason.
Apparently there is a newly discovered, and seldom mentioned “enumerated power” in the KONstitution that allows for actions of this nature.
The ‘enumerated power consists of own word….
“WHATEVER!”
I wouldn’t be shocked, to find out this IS part of their plan. Force as many companies LIKE kroger, to shut store after store, THEN WHINE “ALl those companies are making food Desserts in minority communities, we need to TAKE THEM OVER in the name of equity!”
The stores that closed would have been operating in the red, had barely been able to stay open. Who does it hurt the most? The poor neighborhoods. Shutter their only neighborhood market and then they have to take public transportation to get food, possibly their medications, Not to mention those employees went to no jobs too. If they are lucky enough to get picked up at another store, their “raise” now goes to transportation. Smart move, city council. Guess they don’t know beans about struggling stores have to close.
OF COURSE they don’t.. SINCE THEY keep getting paid no matter what, THEY DO NOT know about regular folk’s struggles… NOR DO THEY CARE.
They should be happy they are working.
I guess folks in Long Beach will just have to get their vegetables at the licker stor…
This is the agenda the current admin. has set out to do. Bankrupt every and any business that they can and then yes everyone will be equal. Everyone will be broke, hungry, homeless, depressed, susceptible and blind to the next phase in the destruction of America. God needs to be first in our lives or America will not last.
I don’t see any evidence that the $4 hazard pay was based on any empirical evidence that Grocery Store workers had higher incidences of the Wuhan Virus than other workers….Just another Nut Job resolution…by serious mentally handicapped politicians.
And since damn near EVER STORE i go into, workers are masked up (some even wear face shields)< AND they have those big plexiglass screens in front of them when they serve customers, i GUESS THOSE masks and such, are NOT WORKING, if they STILL FEEL THIS IS "Hazardous"..