Hundreds of non-government grocery stores in Los Angeles County will receive $ 5 per hour of their pay in arrears as part of the nation’s ‘hero pay’ mandate, which takes effect on Friday and lasts 120 days.
The Board of Supervisors in LA County voted 4-1 on Tuesday to mandate payment assistance for publicly traded grocery stores or retail drug businesses, or for businesses nationwide that have at least 300 employees and more than 10 employees per store yard. The measure only applies to areas without incorporation, which benefits approximately 2,500 hourly grocery workers.
“These workers … have been putting their lives on the line since the beginning of the pandemic to keep our food supply chain going and provide access to medicine our families need,” said supervisor Hilda Solis, who wrote the motion. said in a statement. “Many work in fear and without adequate financial support, while their employers continue to see profits increase and top executives receive steep salary bonuses.”
Supervisor Kathryn Barger voted against the measure, saying she feels it leaves out many essential workers and that it could have unintended consequences.
Barger said officials worked hard to bring retailers to food deserts in unincorporated areas, such as Grocery Outlet in Altadena, which donated food for food rides during the pandemic.
‘I would hate to think we’re driving [out of business] it is precisely the businesses that we have fought so hard to locate in non-incorporated areas, many of which are working class neighborhoods … and that is why I can not vote in favor of 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 passed some dangerous payment mandates.
The province’s ordinance is likely to be challenged in court in the coming days by the California Grocers Assn., Which has sued the city of Long Beach after it passed its ‘hero-pay’ measure.
‘We will be forced to sue [the county] if it passes, and that’s just a pity, because it means, of course, that we will comply with a regulation that has been legally enforced, and the time is starting to make it more difficult for independent businesses doing business in the province of Los Angeles, ”Ron said. Fong said, president and CEO of California Grocers Assn., Which represents more than 300 retailers operating more than 6,000 stores.
The association and the local chamber of commerce groups opposed these mandates, arguing that they were unfair groceries operating low-profit enterprises and therefore did not have the capital to absorb these costs. Opponents also pointed to millions of dollars that groceries have already paid since the start of the pandemic, salary increases, bonuses and paid leave.
The biggest proponent of the mandate, the United Food and Commercial Workers International Union, opposed these arguments, pointing to the millions that grocery stores made as more customers ate at home during the pandemic, and to the bravery of their members who showed up has to work. the face of a virus that can kill them or their families.
At least 5,500 union and non-workers at several grocery stores in Southern California have contracted the virus since March, with at least 428 infected in November during the winter rush, according to data collected by United Food and Commercial Workers International Union Local 770.
“Every day that pays without risk, our members face a huge risk at work, while contributing to the record profits that food stores in the chain make if they stay open and busy,” said John Grant, president of UFCW Local 770, in said a statement.
The LA City Council will consider its own ordinance on a heroic payday on Wednesday.
A new city report found that the increase in sales of grocery stores in the first months of the COVID-19 pandemic was temporary and did not have a profitability trend for stores.
Kroger and Albertsons received a major boost in early 2020, the report said. However, the ‘companies only earned above-average profits during the first quarter of 2020 during the COVID-19 purchase and by the third quarter fell to below average’, the report states. (The country did not complete a similar analysis.)
Retailers are likely to try to absorb the cost because they need to stay competitive, but they could close underperforming stores, which could include places in smaller suburbs, low-income neighbors and large dollar stores and in rural areas, Neil Saunders said. a retail analyst at GlobalData.
“Or it could be a particularly weak or older store in a vibrant neighborhood where newer and better retailers have opened there,” Saunders said.
Saunders said that groceries, especially during the pandemic, found that although the supply of groceries increased in popularity, higher service and transportation costs did not make the service profitable.
“If you keep wasting money, the grocery stores will say ‘OK,’ let’s see where we can reduce labor,” Saunders said. Kroger started testing stores that do not have registers and are self-service instead. only.
Some are concerned about how a patchwork of ‘hero pay’ mandates is popping up in LA County.
The province’s ordinance applies only to areas not incorporated into the country, which include portions of southern LA and much of northern LA County. Many of the 88 cities in the province have no measures, which means that a worker can live in one city with a mandate, but without it can work in another country.
A mandate must be paid to all workers and not through grocery stores, but through state and federal funds, said Burt P. Flickinger III, director of Strategic Resource Group, a retail and consumer goods consulting firm.
‘There must be a joint effort between Sacramento, the county and … Washington to include these poor workers who died, became ill, tragically affected their families, but that the heroes pay, ethically and financially. , should come from the COVID-19 relief bill, ”says Flickinger, who previously worked with unions representing workers in grocery stores.
How much can a mandate for danger payment really have if it only lasts a few months?
Data show that families in California ate an average of 10 meals at home and 11 away from home before the pandemic. In the past year, many more families have eaten at home and therefore spent significantly more money on their grocery bills, Flickinger said.
But as the government’s restrictions and fears surrounding eating at restaurants decrease, people will return to their old eating habits, he said.
Grocery sales will “drop significantly, and if sales drop significantly, the operating profit per store per property will also drop significantly,” he said.
This can lead to some retailers closing underperforming stores to catch up on the cost of ‘hero payment’.
Times staff writers Dakota Smith, Ruben Vives and Suhauna Hussain contributed to this report.