Los Angeles County Approves ‘Hero Pay’ for Supermarket Workers

Hundreds of grocery store workers in unincorporated Los Angeles County will receive $ 5 per hour in hazardous pay in addition to their regular wages as part of the county’s “hero pay” mandate that takes effect Friday and lasts 120 days.

The Los Angeles County Board of Supervisors voted 4-1 Tuesday to demand the pay increase for publicly traded grocery stores or retail pharmaceutical companies, or businesses that have at least 300 employees nationwide and more. of 10 employees per store. The measure applies only to unincorporated areas, benefiting about 2,500 grocery store workers per hour.

“These workers … have risked their lives since the beginning of the pandemic to keep our food supply chain running and provide access to the medicines our families need,” Supervisor Hilda Solís, author of the motion. “Many work in fear and without adequate financial support, while their employers continue to see profits grow and top executives receive high salary bonuses.”

Supervisor Kathryn Barger voted against the measure, saying she felt it leaves out many essential workers and could have unintended consequences.

Barger said officials have worked hard to drive retailers into food deserts in unincorporated areas, like the Grocery Outlet in Altadena, which has donated food for food drives during the pandemic.

“I would hate to think that we’re driving [out of business] the same businesses that we fight so hard to locate in unincorporated areas, many of which are working-class neighborhoods … and that’s why I can’t vote for this, ”said Barger, the only Republican on the board.

Since January, several cities, including Santa Monica, San Jose, Berkeley and West Hollywood, have considered or approved some level of payment mandates for dangerous living conditions.

The county ordinance will likely be challenged in court in the next few days by the California Grocers Assn., Which has sued the city of Long Beach after approving its “hero pay” measure.

“We will be forced to sue [the county] if it happens, and that is just unfortunate because it means that we will obviously comply with an ordinance that was legally passed, and the clock is starting to make it more difficult for independent companies doing business in Los Angeles County, ”said Ron Fong, President and CEO of California Grocers Assn., which represents more than 300 retailers operating more than 6,000 stores.

The association and local Chamber of Commerce groups have resisted these mandates, arguing that they unfairly target supermarkets that operate businesses with low profit margins and therefore do not have the capital to absorb these costs. Opponents have also pointed to the millions of dollars supermarkets have already provided in pay raises, bonuses and paid leave since the pandemic began.

The largest proponent of the mandate, the United Food and Commercial Workers International Union, has countered those arguments, pointing to the millions made by grocery stores as more customers eat at home during the pandemic, and the bravery of its members. who showed up to work in the face of a virus that could kill them or their families.

At least 5,500 unionized and non-unionized workers at various grocery stores in Southern California have contracted the virus since March, with at least 428 infected in November during the winter surge, according to data compiled by Local 770 of the International Workers Union. Commercial and United Foods.

“With every day that passes without risk pay, our members face tremendous risks on the job, all while contributing to the record profits that grocery chains make while remaining open and busy,” said John Grant, President of UFCW Local 770, it’s a statement.

The Los Angeles City Council will consider its own “hero pay” ordinance on Wednesday.

A new report from the city found that an increase in sales by people storing groceries in the first months of the COVID-19 pandemic was temporary and did not translate into a profitability trend for stores.

Kroger and Albertsons saw big increases in early 2020, according to the report. Still, “companies did not make above-average profits until the first quarter of 2020 during the peak of COVID-19 purchases and by the third quarter they had fallen below average,” according to the report. (The county did not complete a similar analysis.)

Retailers will likely try to absorb costs because they have to remain competitive, but they could close underperforming stores, which could include locations in smaller suburbs, low-income neighbors with a high number of dollar stores and in rural areas, he said. Neil Saunders. GlobalData Retail Analyst.

“Or it could be a particularly weak or older store in a vibrant neighborhood where new and better retailers have opened there,” Saunders said.

Saunders said supermarkets have found, especially during the pandemic, that while grocery delivery has gained popularity, higher labor and transportation costs make the service unprofitable.

“If you keep playing with payment, shopkeepers will start to say ‘OK, let’s see where we can cut down on labor,'” Saunders said, adding that Kroger has started testing stores that have no registrations and are instead self-service. . only.

Some are concerned about how a patchwork of “hero pay” mandates is emerging across Los Angeles County.

The county ordinance applies only to unincorporated areas, which include parts of southern Los Angeles and much of northern Los Angeles County. Many of the county’s 88 cities have no measures, which means that a worker can live in one city with a mandate but work in another without it.

A mandate should apply to all workers and be paid not by grocery stores, but through state and federal money, said Burt P. Flickinger III, managing director of Strategic Resource Group, a consumer goods and retail consulting firm. .

“There should be a collective effort between Sacramento, the county and … Washington to include these working poor who have died, have fallen ill, their families have been tragically impacted, to get hero pay, but hero pays, ethics and financially, it should get out of the COVID-19 relief bill, “said Flickinger, who has previously worked with unions representing grocery store workers.

What effect could a Dangerous Living Conditions mandate actually have if it only lasted a few months?

Data shows that before the pandemic, California families ate, on average, 10 meals at home and 11 away from home. In the past year, many more families eat at home and therefore spend much more money on their grocery bills, Flickinger said.

But as government restrictions and fear of eating at restaurants ease, people will revert to their old eating habits, he said.

Grocery sales “will drop significantly, and with sales dropping significantly, operating profit per store per property will also drop significantly,” he said.

This could lead some retailers to close underperforming stores to offset the cost of “hero pay.”

Times staff writers Dakota Smith, Ruben Vives, and Suhauna Hussain contributed to this report.

Source link