Hundreds of grocery workers in Los Angeles County without legal personality will receive $ 5 an hour in hazardousness in addition to their regular wages, as part of the county’s “hero pay” order that goes into effect on Friday and lasts 120 days.
The LA County Board of Supervisors voted 4 to 1 on Tuesday to determine the salary increase for publicly traded supermarkets or retail pharmaceutical companies or companies that have at least 300 employees across the country and more than 10 employees per store location. The measure applies only to unincorporated areas, benefiting around 2,500 hourly workers in grocery stores.
“These workers … have put their lives at risk since the start of the pandemic to keep our food supply chain functioning and provide access to the medicines our families need,” said supervisor Hilda Solis, author of the motion, in a statement. an announcement. “Many are working 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 she left out many essential workers and that it could have unintended consequences.
Barger said the authorities worked hard to take retailers to food deserts in unincorporated areas, such as the Grocery Outlet in Altadena, which donated food to food campaigns during the pandemic.
“I would hate to think that we are driving [out of business] the same companies that we struggle so hard to locate in unincorporated areas, many of which are working-class neighborhoods … and that’s why I can’t vote in favor, ”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 levels of hazard warrants.
The county law is likely to be challenged in court in the coming days by California Grocers Assn., Which sued the city of Long Beach after it passed its “hero pay” measure.
“We will be forced to sue [the county] if approved, which is unfortunate, because it means that we will obviously comply with a decree that has been legally approved and the clock starts to hamper independent business activities in Los Angeles County, ”said Ron Fong, president and chief executive of California Grocers Assn., Which represents more than 300 retailers operating in more than 6,000 stores.
The Chamber of Commerce’s association and local groups have resisted these orders, arguing that they unfairly target traders who operate businesses with low profit margins and therefore have no capital to absorb those costs. Opponents also pointed to the millions of dollars that grocery owners have provided in salary increases, bonuses and paid leave since the pandemic began.
The biggest proponent of the mandate, the United Food and Commercial Workers International Union, countered these arguments, pointing to the millions made by supermarkets 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 can kill them or their families.
At least 5,500 unionized and non-unionized workers at several supermarkets in Southern California have contracted the virus since March, with at least 428 infected in November during the winter peak, according to data collected by United Food and Commercial Workers International Union Local 770.
“Every day that passes without risk, our members face tremendous risks at work, while contributing to the record profits of the supermarket chain, as they remain open and busy,” said John Grant, president of UFCW Local 770, in a communicated.
The LA City Council will consider its own “hero pay” decree on Wednesday.
A new city report found that an increase in sales of people who stocked groceries in the early months of the COVID-19 pandemic was temporary and did not translate into a profitability trend for stores.
Kroger and Albertsons saw huge increases in early 2020, the report concluded. Still, “companies did not earn above-average profits until the first quarter of 2020, during the peak of COVID-19 purchases, and in the third quarter, they fell below average,” the report found. (The county has not completed a similar review.)
Retailers are likely to try to absorb costs because they need to remain competitive, but may close underperforming stores, which may include locations in smaller suburbs, low-income neighbors with lots of dollar stores and in rural areas, said Neil Saunders, an analyst GlobalData retailers.
“Or it could be a particularly weak or old store in a vibrant neighborhood where newer and better retailers opened there,” said Saunders.
Saunders said grocery owners found, especially during the pandemic, that while the popularity of food delivery has grown, higher labor and transportation costs make the service unprofitable.
“If you keep moving the payment, grocers will start saying, ‘OK, let’s see where we can cut labor,'” said Saunders, adding that Kroger has started testing stores that don’t have records and instead, they are self-service only.
Some are concerned about how a patchwork of “hero pay” commandments is emerging across LA County.
County law applies only to unincorporated areas, which include parts of southern LA and much of northern LA. Many of the 88 cities in the county have no measures, meaning that a worker can live in a city with a mandate, but work in another without one.
A mandate should apply to all workers and not be paid by supermarkets, but through state and federal money, said Burt P. Flickinger III, managing director of the Strategic Resource Group, a retail and real estate consulting firm. consumption.
“There must be a collective effort between Sacramento, the county and … Washington to include these poor workers who died, got sick, had their families tragically impacted, to get paid by the hero, but the hero pays, ethically and financially, must leave of the COVID-19 relief bill, ”said Flickinger, who has worked with unions representing grocery workers.
What effect would a risk payment obligation really have if it only lasted a few months?
The data show that before the pandemic, California families ate, on average, 10 meals at home and 11 outside. In the past year, many more families are eating at home and therefore spending significantly more money on their grocery bills, said Flickinger.
But as government restrictions and fear of eating in restaurants ease, people will revert to old eating habits, he said.
Food sales “will drop significantly, and with sales dropping significantly, operating profit per store per property will also drop significantly,” he said.
This may lead some retailers to close underperforming stores to offset the cost of the “down payment”.
Times staff writers, Dakota Smith, Ruben Vives and Suhauna Hussain, contributed to this report.