Kroger grocery chain closes Southern California stores due to new “hero pay” laws leading to worker protests
About 20 grocery store workers rallied in Long Beach, California recently to protest the closure of two Kroger supermarkets. Management at the supermarket chain announced that, in response to a $4-an-hour pay raise to all supermarket employees, it would close those two markets in mid-April and lay off and/or transfer the 200 workers employed at both stores.
At the rally, workers carried homemade signs denouncing corporate greed, demanding hazard pay and calling on all workers to speak out.
Long Beach is an industrial port and logistics city in Los Angeles County. As of last weekend, the city had reported 48,824 cases and 698 deaths from the coronavirus. It lies directly southwest of the city of Los Angeles, which for several weeks has been the worldwide epicenter of the coronavirus pandemic with more than 17,000 deaths and more than one million positive cases as of this writing.
The Long Beach City Council mandated the $4-an-hour “hero pay” wage supplement two weeks ago, in response to the pandemic. The order will last 120 days. Similar ordinances are being proposed in other California cities. The LA City Council is discussing a $5-an-hour hazard pay as are other Los Angeles suburbs.
Last week, the board of supervisors in Santa Clara County also voted to draft a $5-per-hour measure. Similar measures are being considered in San José and the San Francisco Bay Area.
The Long Beach wage supplement applies to supermarkets and all grocery stores with at least 300 employees nationally or more than 15 employees at each store.
Kroger management denounced the Long Beach rule, charging the city with interfering in the wage-bargaining process, and for treating other large retailers unequally. Long Beach exempted retail giants Target and Walmart from the rule, even though both those chains sell groceries. A company statement declared that both stores had been “long-struggling.” A company spokesperson indicated that underperforming stores in other cities would also close if forced to pay the extra amount.
The Long Beach Press-Telegram quoted an email from John Votava, corporate affairs director for Ralphs supermarkets, who called the new mandates “misguided,” placing “any struggling store in jeopardy of closure.”
The California Grocers Association has filed a lawsuit against the Long Beach measure, claiming that “grocers operate with razor thin margins.”
Not so for Kroger Company—the Brookings Institution reported the firm made $2.6 billion in profits between February 2 and November 7, 2020, out of which it used $989 million for stock buybacks.
Last November, in a study entitled “Windfall for Profits and Deadly Risks,” Brookings examined pandemic hazard pay at Kroger and 12 other companies, ranging from big-box stores and grocery chains to pharmacies and electronic stores. “The numbers are stark,” declared the report. “They paint a picture of most companies prioritizing profits and wealth for shareholders over investment in their employees.” The study found that these companies could have quadrupled hazard pay to their workers and still made a handsome profit during the pandemic.
Nationally, the average Kroger’s cashier makes a poverty wage of $10 an hour. In Long Beach, a city with a high cost of living, the minimum wage for employers with 26 or more workers is almost as exploitative, $14 per hour.
Kroger and the other retailers have counted on the complicity of the United Food and Commercial Workers Union (UFCW). Nearly 17 years ago, a 19-week strike and lockout involving 59,000 Los Angeles area grocery workers resulted in a resounding victory for the employers, including Ralphs and other Kroger markets.
The UFCW accepted drastic reductions in overtime pay, cuts to holiday pay and sick time, increases in health care deductibles and the elimination of defined benefit pension plans. This sellout then served as a model for UFCW contracts across the country.
More recently in 2019, the UFCW settled for contracts in California and Oregon with wages increases of under one percent per year, well below the inflation rate, while banning strike action. In 2020, the UFCW pushed through another sellout agreement in West Virginia. A $4-an-hour increase would barely begin to compensate for those betrayals
Workers should place no confidence in the union to defend their jobs or wages or to protect them from the coronavirus pandemic. That is why grocery workers across California, the US, and internationally must take matters into their own hands, forming rank-and file committees independent of the UFCW and other unions to fight for adequate pay and resources to confront the COVID-19 pandemic and make up for decades of attacks on wages, benefits and working conditions.
Fed Chair Jerome Powell Calls for ‘Society-Wide’ Push to Restore Labor Market
Federal Reserve Chairman Jerome Powell said the central bank will keep monetary policy “patiently accommodative” even if prices jump later this year and urged lawmakers not to worry about budget deficits until the economy fully recovers.
“Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared,” Powell said Wednesday in a speech to the Economic Club of New York.
Powell said an expansive fiscal policy is an “essential tool” for restoring the labor market.
“Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy. It will require a society-wide commitment, with contributions from across government and the private sector,” Powell said. “The potential benefits of investing in our nation’s workforce are immense.”
Powell’s remarks came as lawmakers consider the Biden administration’s proposal for a $1.9 trillion pandemic relief spending bill. Critics of the proposal—including leading liberal economists Larry Summers and Olivier Blanchard—have said the proposed spending is too high and risks triggering inflation.
In stark contrast, Powell downplayed the risk of inflation from too much deficit spending. He said that prices could rise if demand surged as the economy reopened but this would be a temporary event that would not cause the Fed to raise rates or result in sustained inflation.
Powell praised the progress made during the pre-pandemic Trump era, although he did not credit the Trump administration for the labor market’s strength.
Fortunately, the participation rate after 2015 consistently outperformed expectations, and by the beginning of 2020, the prime-age participation rate had fully reversed its decline from the 2008-to-2015 period. Moreover, gains in participation were concentrated among people without a college degree. Given that U.S. labor force participation has lagged relative to other advanced economy nations, this progress was especially welcome.
As I mentioned, we also saw faster wage growth for low earners once the labor market had strengthened sufficiently. Nearly six years into the recovery, wage growth for the lowest earning quartile had been persistently modest and well below the pace enjoyed by other workers. At the tipping point of 2015, however, as the labor market continued to strengthen, the trend reversed, with wage growth for the lowest quartile consistently and significantly exceeding that of other workers.
At the end of 2015, the Black unemployment rate was still quite elevated, at 9 percent, despite the relatively low overall unemployment rate. But that disparity too began to shrink; as the expansion continued beyond 2015, Black unemployment reached a historic low of 5.2 percent, and the gap between Black and white unemployment rates was the narrowest since 1972, when data on unemployment by race started to be collected. Black unemployment has tended to rise more than overall unemployment in recessions but also to fall more quickly in expansions.4 Over the course of a long expansion, these persistent disparities can decline significantly, but, without policies to address their underlying causes, they may increase again when the economy ultimately turns down.
These late-breaking improvements in the labor market did not result in unwanted upward pressures on inflation, as might have been expected; in fact, inflation did not even rise to 2 percent on a sustained basis. There was every reason to expect that the labor market could have strengthened even further without causing a worrisome increase in inflation were it not for the onset of the pandemic.
The Fed chief painted a dour picture of the current labor market, saying that the unemployment rate is probably closer to 10 percent than the 6.4 percent in official figures. He said misclassification of some workers as employed and people dropping out of the labor force has led headline unemployment figures that “dramatically understated” the economic damage of the pandemic.
GOP Senators Reintroduce Mandatory E-Verify to Protect U.S. Workforce
A group of Senate Republicans, led by Sen. Chuck Grassley (R-IA), have reintroduced legislation that would mandate E-Verify, the program designed to protect the United States workforce by banning employers from illegal hiring.
Grassley’s Accountability Through Electronic Verification Act would make permanent and mandatory the E-Verify program to prevent employers from hiring illegal aliens over Americans and legal immigrants.
The legislation is co-sponsored by senators Marsha Blackburn (R-TN), John Boozman (R-AR), Shelley Moore Capito (R-WV), Tom Cotton (R-AR), Joni Ernst (R-IA), Cindy Hyde-Smith (R-MO), Jim Inhofe (R-OK), Mike Lee (R-UT), John Thune (R-SD), and Roger Wicker (R-MS).
“Expanding the system to every workplace will improve accountability for all businesses and take an important step toward putting American workers first,” Grassley said in a statement.
A party that wants to be pro-American worker must oppose mass amnesty, prevent abuse of guest worker programs, support #MandatoryEVerify & work to reduce overall immigration numbers. @GOPLeader https://t.co/lP1XFbLM9v
— NumbersUSA (@NumbersUSA) February 10, 2021
The legislation would require all U.S. employers to use E-Verify within one year of its enactment into law while mandating that federal contractors and agencies use the program immediately. Most significantly, the legislation increases penalties for employers that hire illegal aliens over American citizens and requires them to check their current employees’ legal status within three years.
To tackle identity theft in illegal employment, the legislation would have the Social Security Administration track multiple uses of the same Social Security numbers and clarifies that those stealing Americans’ identities can be prosecuted for aggravated identity fraud.
Cotton said it is often the case that “crooked employers have a strong incentive” to hire illegal aliens as they are “willing to work under the table for little pay and few benefits.”
“Permanent, nationwide E-Verify will help us build an economy that works for American citizens while eliminating a serious incentive for illegal aliens to come here in violation of our laws,” Cotton said.
Why isn’t every senator co-sponsoring [Sen. Grassley’s] E-Verify bill?” Mark Krikorian of the Center for Immigration Studies wrote in a post.
Mandatory E-Verify and more protections of the U.S. workforce remain some of the most popular policy proposals despite overwhelming opposition from the big business lobby, corporate special interests, and the donor class.
A weekly survey conducted by Rasmussen Reports shows that more than 7-in-10 likely voters agree that mandatory E-Verify should become law to protect the U.S. workforce. This includes 74 percent of Hispanic likely voters. Less than 20 percent of likely voters oppose mandatory E-Verify.
Additionally, 65 percent of likely voters say it is better for employers to raise wages and try harder to recruit the 17.1 million Americans who are out of work rather than importing cheaper foreign workers. Another 61 percent of likely voters say the U.S. already has enough skilled talent in the domestic labor pool for employers to recruit from.
John Binder is a reporter for Breitbart News. Email him at jbinder@breitbart.com.
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