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Kroger is closing stores rather than giving workers an extra $4 in pandemic ‘hero pay’

Robert Gonzales, a Kroger employee for 26 years, addresses a crowd of supermarket workers gathered in front of a Food 4 Less in Long Beach, Calif., on Wednesday. (Frederic J. Brow/AFP/Getty Images)
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Two grocery stores in Southern California will shutter in April in response to a local “hero pay” measure requiring a $4-an-hour increase for grocery workers during the pandemic.

Kroger, which owns more than a dozen grocery chains, announced this week that it would close a pair of Long Beach stores — a Ralphs and a Food 4 Less — specifically citing the ordinance the city’s mayor signed into law late last month. The city was the first in the state to introduce a measure requiring some grocery retailers to give workers a temporary hourly pay bump during the pandemic.

“The irreparable harm that will come to employees and local citizens is a direct result of the City of Long Beach’s attempt to pick winners and losers,” the company said in a statement, calling it “deeply unfortunate.”

Kroger’s move to close the stores comes amid growing momentum for similar hazard pay policies in cities across the state, as well as elsewhere in the country. Officials in two other cities — the Oakland City Council and the Los Angeles City Council — voted unanimously on Tuesday to mandate temporary $5-per-hour pay increases for some grocery workers.

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The Long Beach policy is in place for 120 days and includes groceries that sell at least 70 percent food products and employ more than 300 people nationally with at least 15 employees per store. Under those terms, it may exclude retailers like Target and Walmart.

Long Beach Councilwoman Mary Zendejas, who sponsored the measure, said she was “incredibly disappointed” in Kroger’s move to close stores.

“It really saddens me that they’d rather take away 200 jobs instead of doing the right thing, which is paying hazard pay for these local grocery store workers who risk their lives every day they come in and who are putting their lives on the line every second they’re working,” she told The Washington Post.

She said the closures will also have an impact on the communities they serve, noting that Food 4 Less serves many low-income residents in the area.

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Experts and groups on both sides of the hazard pay debate are worried Kroger’s decision could signal a broader response.

Molly Kinder, a fellow at the Brookings Institution who studies front-line workers, said it was notable that Kroger is closing two stores in the first city in California to introduce such a mandate.

“I have to interpret that this statement is meant to signal that more Krogers could close if this is expanded,” Kinder said, adding it seemed to “send a message that mandates could come with consequences.”

Ronald Fong, president of the California Grocers Association trade group, which filed a lawsuit over the Long Beach ordinance, said the group tried to warn the city about “unintended consequences” of the measure.

“When a city tries to enact what is a 30 percent raise for grocery store workers, it is impossible to be able to absorb that without doing one of three things,” Fong told The Post. “Raising prices and passing it along to our customers, closing stores because they will no longer be profitable with that kind of labor expense or reducing hours and cutting shifts.”

The group announced Wednesday that it would also file lawsuits against Oakland and the city of Montebello to challenge similar $5-an-hour hazard pay measures.

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John Grant, president of UFCW Local 770, which represents more than 20,000 grocery workers in four California counties, likened the company’s decision to shutter stores to a plot from one of the Star Wars films.

“If anyone dares stand up and ask to reconsider the distribution of equity within our communities, they blow that planet up,” Grant said. “It’s reckless capitalism run amok.”

Grant said he was partly worried other retailers could respond to hazard pay measures by closing stores. But he said he hoped pushback from workers, community members and elected officials would help prevent that from happening.

Grant pointed to the move by other city councils to move forward to approve hazard pay ordinances this week, even after Kroger’s announcement.

Zendejas questioned Kroger’s argument that it could not afford extra pay for workers, saying the company’s third-quarter sales increased $1.7 billion from 2019 to 2020.

“When large corporations make record profits and double their earnings — they need to share that success with those providing the labor,” Long Beach Mayor Robert Garcia tweeted this week after Kroger’s announcement. “Period.”

According to a report from Brookings, Kroger had doubled its profits last year.

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Fong, whose association represents more than 6,000 grocery stores in California, acknowledged grocery store sales have increased.

“I’m not denying our volume is up, but it’s not high like it was in March. Plus the councils are not considering the expense side of the equation,” Fong said, adding that some stores have spent “billions” in safety measures, including personal protective equipment for workers, during the pandemic.

Kinder said there is ongoing debate about whether it’s fair for local governments to mandate that only certain companies pay hazard pay to workers, while other essential workers, including health workers, are left out of the measures.

She said there is a “rationale in directing some of these mandates at those who can afford to pay.”

She said that while policies such as a minimum-wage increase can help all workers, “that’s going to take a while, so right now what do we do?”

“Local hazard pay mandates are promising and I hope they spread — assuming they pass legal challenges — and that they evolve to include more essential workers,” she said.

Some grocery stores, Kinder added, have voluntarily extended hazard pay.

Trader Joe’s announced that as of Feb. 1, it would increase a “thank you” pay bump for all hourly, nonmanagement workers to $4 an hour during the pandemic. According to the Seattle Times, a letter to workers posted in a Seattle store specifically referenced the move by cities in California and Washington state to push hazard pay measures. That letter, however, noted that the company would scrap midyear raises.

“Some companies are voluntarily doing it. Most are not,” Kinder said. “The question is what do we do about that?”

Correction: A previous version of this story implied that a planet blows up in “The Empire Strikes Back.” No planets blow up in that particular Star Wars film. This story has been updated.

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