The Workers’ Plight

April 14, 2021

Since the beginning of the pandemic, employers have struggled with the issue of compensation for workers nationwide. Unknown risks, coupled with high exposure levels, led many major employers to offer hazard or “hero” pay voluntarily. 

As COVID-19 cases continued to increase, many employers ended their policies of offering hazard pay after the first shelter in place order was lifted before last summer, according to Jim Araby, the political and strategic director of the United Food and Commercial Workers (UFCW) Local 5 union.

After the end of hazard pay, local unions such as UFCW Local 5 began to negotiate with corporations to obtain some sort of compensation for the risks they were undertaking with their daily jobs. 

Araby said, “Grocery workers, in particular, took on a much higher level of risks than many other workers because they didn’t have control of their environment. There was no way of tracking any exposure, so many were left helpless.”

For Araby, San Mateo’s ordinance signaled a positive trend in local governments intervening to provide grocery and drugstore workers with additional compensation. Speaking to how the ordinance will support the workforce, Araby highlighted the risks that workers in this sector still face, even as the U.S. has pursued mass vaccination policies that prioritize essential frontline workers.

Araby said, “Grocery workers and other essential workers have access to the vaccine today, but this is more about rewarding workers for taking the risk to provide us with essential services. [Grocery and drugstore chains] have been the only ones making profits, but there is still that elevated risk for both vaccinated and unvaccinated workers, as both groups could bring the virus home to their families.”

According to Araby, the grocery industry’s profits are up over 30% on average. In an analysis provided by Brookings Institution, a think tank based in Washington D.C., the top retail companies “earned on average an extra $16.7 billion in profit this year compared to last—a stunning 40% increase—while stock prices are up an average of 33%,” supporting Araby’s contention.  

Furthermore, the 13 companies observed by Brookings raised wages for their frontline workers by an average of just $1.11 per hour since the beginning of the pandemic. For those same workers, the average time since receiving hazard pay has totaled 133 days as of November 2020.

Addressing the concerns that local hazard pay mandates could lead to the closure of grocery stores and drugstores, as seen in Seattle and Los Angeles with Kroger’s planned closures, Araby maintained that these closures were politically motivated and tactical ploys to discourage other municipalities from pursuing similar legislation. 

Araby said, “Kroger has aggressively been trying to use this hazard pay ordinance as a scapegoat for the closure of these underperforming stores. Many of the stores they are closing were going to close before the pandemic, and their only reason they were kept open is that they began to make massive profits.”

With a record year of profits in 2020, Kroger seemed poised to continue with its strong showing, propelled by the momentum provided by their 14.1% increase in identical sales (excluding fuel) in the fiscal year 2020. Despite large profits and a jump in sales, Kroger still struggles to compete with other large chains. Araby highlighted Kroger’s attempt to shift the blame to local governments by noting that Kroger would not immediately close the stores but reversed course after a pivotal legal decision.

“They’re still trying to squeeze out as much profit as they can before blaming hazard pay for the closure. They are [closing the stores] not because of an economic decision, but rather, a political one; they are trying to scare other cities into not continuing with these policies,” Araby said.

The Kroger store closures came soon after important legal decisions affirmed the legality of these sorts of ordinances.

Kroger’s Decline by Hudson Fox

On Feb. 25, 2021, U.S. District Judge Otis D. Wright II concluded that the California Grocers Association (CGA) failed to establish a likelihood of success in its argument for a preliminary injunction that targeted the hazard pay mandate issued in Long Beach, Calif.

“A preliminary injunction is ‘an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief,’” Wright wrote, deciding that CGA’s argument was not sufficient enough to merit a trial. 

After the legal challenges failed to stop the mandate, Araby believes that companies took more drastic measures, such as closing stores, to shift the blame off of their management and onto hazard pay. For Araby, this only calls more attention to the fact that these companies do not want to provide their workers with ample financial support.

“In my mind, this is less about their lack of ability to pay and more about the greed,” Araby said.

By and large, Araby was positive about the level of attention the issue of hazard pay mandates has recently received. He expressed optimism at the prospect of widespread vaccinations by this summer that would make COVID-19 less rampant.

“Hopefully, by the middle of summer, the risk will be less. If that occurs, there will no longer be a need for some sort of hazard pay, but until then, [the workers] believe it is necessary,” Araby said.

Araby summed up his feelings, underscoring major companies’ failures to meet the workers’ needs that are placed in hazardous conditions as a part of their daily work.

Araby said, “The bottom line is that these companies have not rewarded the workers taking these sorts of risks, risks that put their lives in danger every day.”

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The Workers’ Plight