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When the COVID-19 pandemic swept the nation last March, many large food retailers increased their frontline workers’ pay by several dollars an hour. Dubbed ‘hero pay,' the programs have since ended, despite the remaining dangers for workers. Some cities have passed measures to make hazard pay mandatory—but despite high pandemic profits, major grocery chains are pushing back. Molly Kinder of the Brookings Institution joins to discuss.
For more on hazard pay for workers on the front lines of the COVID-19 pandemic, I recently spoke with Molly Kinder from the Brookings Institution.
So grocery store workers are among the quintessential examples of essential workers who have been out on the COVID-19 frontline throughout the pandemic. They are at risk of contracting COVID and potentially passing it back to their family. And they earn very low wages typically. So grocery workers on average make about $11.50 an hour nationwide.
So when you look around the country, what are some cities doing to try to, well, make up for this? I mean, if they institute laws that try to make grocery store chains pay more, is it working?
So the reason I think that you're seeing this momentum on the west coast of city and county governments passing these mandates, requiring some of the large grocery chains to pay hazard pay is because, frankly, a lot of them are not voluntarily doing so on their own.
So despite the fact that at Brookings, we documented that the major grocery chains have earned enormous profits during the pandemic and largely because of the pandemic, they typically ended their hazard pay in the spring and summer. Since then, the pandemic has grown worse. We are still not yet at a place where grocery workers can go to work and not risk their lives and their family's lives. And despite these big profits, they are not typically passing that extra wealth onto their workers in the form of hazard pay. So some city and county governments are stepping up to say, we're going to require you to do so.
So what are companies, corporations that are profiting during the pandemic, what are they doing with that cash if they're not passing it on to their workers?
So if you look at the top three grocery providers in the country, Wal-Mart, Kroger and Albertsons, overall, if you look at their profits in the first three quarters of 2020 compared to the previous year, they've almost doubled overall. So Kroger, for instance, has doubled its profits. It's made an extra $1.3 billion. And this is even after paying all the costs for cleaning and safety and hazard pay, they made an extra $1.3 billion. And what's striking is they haven't given any hazard pay since May. What they have done with some of that profit is they have spent upwards of $1 billion repurchasing their stock.
Which makes it go up?
Right. And that is going to benefit their shareholders. It doesn't necessarily benefit the workers who are every day, during their shifts, risking their health for very low wages. Kroger, nationally, a typical cashier, might make around $10 an hour. And the Kroger workers I've interviewed have a sense that these Kroger called us a hero, they initially offered us this $2 an hour hero pay that ended in May.
We know that their profits have been up a lot since the previous year. Why are we not seeing some of that? So I think some of Kroger's decisions in terms of not carrying on the hazard pay and seeing these big profits and choosing to prioritize shareholders is quite striking.
So is there any truth to, let's say it's not the Kroger's or the Amazons or the Wal-Mart, other grocery chains out there saying, you know what, if you require us to do this, then we're going to have to pass that cost on to customers because we don't have enough money in the bank to do both.
I think there's a really reasonable debate that can be had about what's the right level of hazard pay that strikes a balance between the company's profits and how much they can afford, which workers should be included in those mandates. I think some of those details are fair game for debate. I don't think it's a fair assessment to say that these large, big retail and grocery chains do not have resources to compensate their workers extra. That simply is just not verified in the data. And I think there is a question of, what should profit look like in a pandemic when it's enabled by work, very low wage work that is so risky? These companies went into the pandemic making a profit, but those profit levels have gone up significantly. Should we expect as a society that they're going to pass more of that to their workers, and if they choose not to, is there a place for government to step in and say, you need to.
Your reports took a look at the grocery industry. But one of the things a pandemic has made more popular is delivery services. You've got all sorts of people, whether it's people that are delivering your Amazon, whether its packages, whether it's people that are delivering your groceries, whether it's somebody that's bringing you takeout food. A lot of those companies are, also a lot of those employees are also low wage workers. So, I mean, I guess my question is, is where should we draw the line is what is an essential worker and not, because there's so many other industries that are also booming during the pandemic where people are working for low wages.
There's no question that there are millions of essential workers who are risking their health for very low wages. I find that to be a moral indignity. As a society, all of us in society are benefiting from that work. We're able to stay healthy, stay fed. Many of us are able to stay working at home because of this work. As a society, do we owe it to them to make sure they're paid extra?
I've written several times at Brookings calling for Congress to pass federally-funded hazard pay so that all low wage essential workers could access that additional pay. I think the challenge for some of these local governments is that hasn't happened. There has been no federal money dedicated to hazard pay. A lot of employers of essential workers have struggled in the pandemic, nursing homes, hospitals, social service agencies, restaurants that are struggling just to keep their doors open. We've identified some of these very profitable, large retail and grocery companies like the Wal-Mart's and Amazons of the world. And I think there's a real place for those companies to step forward and share their profits and hazard pay.
But many other essential workers are deserving of hazard pay, the challenges without public money to help finance it, some employers would struggle to pay for it. So these mandates are trying to thread that line of sparing some of those employers that might struggle to pay extra and targeting the employers that do have them have the resources. Did they get that right? It's not clear. I think there are some easy ways to include more essential workers and some ways that maybe some public money can come in to reimburse struggling employers.
Molly Kinder of Brookings, thanks so much.
Thanks for having me.
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