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Clash over hazard pay for grocery workers in COVID-19 pandemic
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Grocery chains are coming under pressure to boost hourly employees' pay again, as municipalities push continued aid for frontline workers nearly a year into the Covid-19 pandemic.
Seattle, Long Beach, Calif., and other cities have passed new rules requiring supermarkets to provide employees temporary bonus pay. Others, including Los Angeles, are considering similar mandates designed to help employees who have to show up for work in public-facing jobs like cashiers or baggers and risk exposure to the coronavirus.
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Some grocers are pushing back, saying that shoppers will bear the costs. Grocery executives say rules to raise wages — in some cases by as much as $5 an hour — will increase expenses by about 30% in stores and squeeze already thin profit margins. Some chains including Kroger Co. say they will close some stores in areas with new wage mandates, while others say they are boosting food prices or may cut back on services like checkouts.
Although the pandemic has driven higher sales and profits for grocery chains, companies say the cost of doing business has risen, too, and their most profitable sections, such as buffets and salad bars, remain closed in many locations.
KROGER TO SHUTTER MORE LOCATIONS OVER SEATTLE'S HAZARD PAY MANDATE
"We're not in a nonprofit organization," said Rob McDougall, chief executive officer of California chain Gelson's Markets. The company raised prices for thousands of products in its Long Beach store after mandated bonus pay increased expenses by about 25% in recent weeks. Mr. McDougall said the higher prices cover only half the new costs, and he expects nearly a 13% decline in overall profits.
The fight over frontline worker pay has heightened as the pandemic nears the one-year mark in the U.S. Many grocery chains increased hourly wages for workers in the spring but phased out so-called hazard pay months later. They have provided two weeks of sick pay for employees who need to quarantine, and overtime for workers who cover those shifts.