Kroger is closing two supermarkets, Ralphs and Food 4 Less, in Long Beach, Calif., After the city decided to require the supermarket company to give employees an extra $ 4 an hour in risk subsidy during the pandemic.
“As a result of the City of Long Beach’s decision to pass a decree determining the extra payment for grocery workers, we made the difficult decision to permanently close stores in Long Beach,” the company said in a statement for Press-Telegram. “This erroneous action by the Long Beach City Council goes beyond the traditional negotiation process and applies to some, but not all, grocery workers in the city.”
The ordinance approved on January 19 stated that any grocery store with 300 employees across the country and 15 employees in Long Beach would have to give its employees an extra $ 4 an hour for 120 days due to the coronavirus pandemic.
“Kroger’s decision is unfortunate for workers, buyers and the company,” the city said in a statement.
After the ordinance was approved, the California Grocers Association filed a lawsuit against the city saying it was interrupting the collective bargaining process.
“An increase of $ 4 / hour represents an increase of around 28% in labor costs for traders. There is no way that grocery stores can absorb a huge cost increase without compensation elsewhere, considering that grocery stores operate with minimal margins and many stores already operate in the red, ”said California Grocers Association President and CEO Ron Fong. “The Long Beach City Council put politics ahead of families and jobs in the middle of a pandemic. This was entirely preventable. “
Other areas of California are also looking to make employers pay risks to their employees during the pandemic. Montebello City Council passed a law similar to Long Beach requiring large supermarkets to give an extra $ 4 an hour for the next 180 days. The Los Angeles City Council will review a similar proposal soon, the Press-Telegram said.
Ralphs’ director of corporate affairs, John Votava, told the media that other stores could close if these ordinances were approved. “These misguided mandates can put any store at risk of being closed,” said Votava.
Across the country, there is a struggle to raise the federal minimum wage. President Biden said he supports a $ 15 minimum wage imposed by the federal government.