By Annie Sciacca and Maggie Angst
January 31, 2021
A year into a pandemic that is still raging, San Jose and Oakland may force large retail businesses — primarily grocery chains — to give their front line workers “hazard pay” until the disease is finally vanquished.
Workers in both cities would see their paychecks boosted by $5 an hour if their respective city councils approve emergency ordinances on Tuesday.
It’s a drastic move that labor unions say is long overdue to compensate workers whose daily interaction with the public puts them at greater risk of getting COVID-19. But it’s drawing heavy fire from major grocers that counter they too have had to weather the storm by investing big sums of money to protect employees and customers.
If the councils move ahead, San Jose and Oakland would join Long Beach, Seattle and Santa Monica in doing so while Berkeley and Los Angeles weigh whether to follow suit.
In Oakland, the emergency ordinance would immediately apply to large grocery stores — which it defines as “15,000 square feet in size … that (sell) primarily household foodstuffs” and have 500 or more employees nationwide. Such stores in Oakland include Cardenas Markets, Safeway/Albertsons, Save Mart, Target, Trader Joe’s and Whole Foods, according to a city memo.
In San Jose, a proposal by Councilmember Sergio Jimenez would target corporate grocery stores, chain supermarkets and retail stores that sell groceries and employ at least 300 workers total nationwide. Small grocers and stores would be exempt on the assumption they’ve already been disproportionately hurt by the pandemic.
The hazard pay mandate wouldn’t apply right away in San Jose, however. Council approval of the idea would direct the city attorney to craft an ordinance to be brought for a final vote.
“Cases are still rising, especially among people who don’t have the luxury of working from home,” said Miya Saika Chen, chief of staff for Oakland Council President Nikki Fortunato Bas, who is introducing that city’s ordinance. “We just met with grocery workers last week who were telling us how scared they are — they are constantly exposed to new people, and they still don’t feel safe. Hazard pay would at least give them some peace of mind and a safety cushion to get through this. ”
Many grocery stores bumped up workers’ pay early into the pandemic but later stopped. In the Bay Area, Lucky Stores is the only major grocer still offering hazard pay, according to Jim Araby, a spokesperson for United Food and Commercial Workers 5, which represents about 23,000 grocery workers.
As COVID-19 cases and deaths continue to be reported at some of the highest levels since last spring, food workers and their advocates say they need the money now as much as ever.
Large retailers can afford it, unions and proponents of the bill argue.
According to a study by the Washington, D.C.-based think tank Brookings Institution, some of the top 13 retail companies in the country such as Target and Walmart saw their profits soar 40% in 2020 above the previous year and together earned on average an extra $16.7 billion in profits. At Albertsons Co., which owns the Safeway grocery chain, profits for the first two quarters of 2020 rose a staggering 153% compared with the same period in 2019, according to the report.
Yet, front line workers saw little of that boom. The 13 companies studied by the Brookings Institution raised the wages of their frontline workers by an average of only $1.11 per hour since the start of the pandemic.
“Given that they’re putting their lives on the line and risking themselves to infection every day, our workers should also have some of the benefits and reward,” Araby said. “They have to go to work. They have to face the public. But the CEOs of those companies, who are raking in profits, they aren’t facing the public.”
UFCW 5 has recorded 1,500 cases of COVID-19 among its members and at least four deaths. On top of that, about 10% of the represented employees are no longer working because they’re among population segments most vulnerable to severe illness from the virus.
“If private industries won’t protect the interest of workers, then that’s when the government needs to get involved,” Araby said.
But industry has balked at the idea, warning that it will drive up grocery prices at a time when many Californians are struggling to put food on the table.
“They’re asking grocers to absorb what amounts to a 30% pay raise for workers. That is going to put grocers into a bad position,” Ron Fong, president and CEO of the California Grocers Association, said in an interview Friday.
While he acknowledged that all the “panic buying” at the start of the pandemic drove up sales, Fong said consumer trends have returned closer to normal. At the same time, grocers have invested a lot of money to supply workers with protective gear such as masks, and many have given employees with COVID-19 symptoms two extra weeks of paid sick leave.
The association filed a federal lawsuit against Long Beach, the first city to introduce a hazard pay ordinance. The lawsuit argues its hazard pay ordinance is unconstitutional in targeting grocery stores over other industries and that it interferes with federal labor law that protects the collective bargaining process.
But Long Beach’s legislation has been copied by cities including Seattle and Santa Monica. Others like Berkeley and Los Angeles are reviewing drafts of hazard pay ordinances that will be considered in the next few weeks.
Earlier this week, the Santa Clara County Board of Supervisors voted to implement a “Hero Pay” ordinance for essential workers employed by pharmacies and fast-food outlets, in addition to large grocery stores. The ordinance would last for 180 days after implementation.
Most of the ordinances that cities are considering would either expire after a certain period or are tied to local health orders.
Oakland’s proposed ordinance would sunset when the Bay Area is determined by the state to be at a level of “minimal risk,” or the yellow tier, according to California’s color-coded risk assessment model. San Jose’s would last until the county health officer lifts mandatory directives for the stay-at-home order.
Chen, the Oakland council president’s chief of staff, said that city’s proposed ordinance wouldn’t affect employers with collective bargaining agreements that waive its provisions and would allow employers already offering hazard pay to use that amount as credit toward reaching the $5 per hour bonus. A store that is currently offering $2 per hour on top of base pay, for instance, would only have to add $3 more.
Jimenez, the San Jose councilmember, doesn’t buy the argument that large grocers would be significantly hurt by the ordinance.
“To the extent anyone says these corporations can’t afford this, I think it’s ridiculous,” he said. “While many small businesses have had to close during the pandemic, many of these big box stores and chain grocers have been reaping tons of profits.
“I think, in the end, we’re here to represent the people, and I think it’s certainly in the jurisdiction and purview of the city to do this,” he added. “There might be fear of litigation, but I don’t think that should stop us from doing the right thing.”