Let's take a look at the practical reality of what happens when governments force an increase in minimum pay... even when the pay increase is temporary.
Long Beach Ralphs, Food 4 Less stores to close over $4 ‘hero pay’ boost for grocery workers
https://ktla.com/news/local-news/ra...ver-4-hero-pay-boost-for-grocery-workers/amp/
Kroger, the parent company of Ralphs and Food 4 Less, will soon shut down two of its stores in Long Beach in response to the city imposing a “hero pay” increase of $4 per hour for some grocery store workers.
The Ralphs at 3380 N. Los Coyotes Diagonal and the Food 4 Less at 2185 E. South St. are slated to close on April 17, the company said Monday.
In announcing the closure, Kroger cited a recently passed Long Beach City Council
ordinance that mandated the hazard pay bump for at least 120 days amid the increased health risk to workers during the ongoing COVID-19 pandemic. The new law affects grocery stores with at least 300 employees nationwide or more than 15 employees per market in the city.
“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,” a company spokesperson said news release. “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.”
Kroger, which issued a
$2 pay boost at the start of the pandemic, noted that it has already spent about $1.3 billion to reward associates and implement dozens of coronavirus-related safety measures since March, when the virus’ spread began accelerating in the U.S. That’s on top of other additional benefits offered to employees during the pandemic, including paid emergency leave, the company said.
The decision was criticized by a union that represents 22,000 workers — among them grocery store employees — in Orange and parts of Los Angeles County.
“After everything they’ve been through and all the sacrifices and the service our members have provided Long Beach during the pandemic, Kroger responds with this chilling message to workers,” Andrea Zinder, president of UFCW Local 324, said in the union’s statement. “Kroger closing these stores is a clear attempt to intimidate and discourage workers from standing up and using their voice to create better working conditions and wages.”
The
California Grocers Association, which represents more than 300 retailers and opposes the ordinance, issued its own response to Kroger’s decision, saying it had previously warned that the new law could result in store closures.
“This is truly unfortunate for the Long Beach community, its grocery workers and consumers, but not surprising given the magnitude of the Council’s actions,” Ron Fong, the group’s president and CEO, said in the statement Monday. “We repeatedly warned that a $4/hour increase would have major unintended consequences – including potential store closures, the reduction of work for employees, and higher grocery costs for customers.”
But the city’s effort to boost pay for many grocery workers had also earned praise, including from the Long Beach Coalition.
“It is shameful that big grocery companies, which are raking in record profits during the COVID-19 pandemic, are attempting to deny their workers the compensation they deserve,” Víctor Sánchez, director of the Long Beach Coalition for Good Jobs and a Healthy Community, told KTLA in a statement after the council unanimously voted for the law.
A similar measure was also approved by the
L.A. County Board of Supervisors last month. The $5 per hour increase applies to grocery and drug stores in unincorporated parts of the county that are publicly traded companies or have at least 300 employees nationwide.
