Virus cases on the rise, but retail workers' compensation isn't

Nov 19, 2020 Travel News

Virus cases on the rise, but retail workers’ compensation isn’t

With coronavirus cases on the rise across the country, retailers are bracing for another rush of buyers worried about new lockdowns and pandemic shortages.

But many traders, billed as heroes in the first wave of the pandemic, aren’t getting the same level of bonuses and raises this time around, even as the risks to their health increase. Even though some companies have announced a new risk premium in recent days, some industry observers say many retailers are not sufficiently sharing the profits they earned during the pandemic with their workers, but instead benefiting shareholders through share buybacks.

Amazon, which last month said its quarterly profit rose nearly 200%, ended its $ 2-an-hour wage hike for workers earlier this year and then provided a bonus linked to pandemic in June, but a spokeswoman said no new risk premium was expected.

Walmart, which on Tuesday announced another sharp increase in quarterly sales, had paid a series of special cash bonuses, but the company has not generally raised wages to reward workers during the pandemic.

The Kroger grocery chain offered increases at the start of the pandemic and bonuses until mid-June, but those have ended. Employees nationwide have staged protests outside stores asking Kroger to restore pay, especially given his booming business – sales are skyrocketing, and he recently said his business results for 2021 “would be higher than what we expected before the Covid-19 pandemic ”. This week, the company told workers it would receive discounts at its fuel centers and a $ 100 in-store credit as a “holiday reward.”

Lowe’s said in its quarterly earnings report on Wednesday that it had already paid more than $ 800 million in pandemic-related benefits to employees. At the same time, the company said it plans to buy back around $ 3 billion of its own shares in the fourth quarter, after spending around $ 1 billion on buybacks and dividends in the third quarter.

“We’re asking the workers who have the least to sacrifice the most, and they’re not even getting compensated in return,” said Molly Kinder, a member of the Brookings Institution, which is preparing a report that ranks the largest retailers who have been the most. more generous to their workers during the pandemic. “Businesses have the money to do it.”

The issue of the risk premium for retail workers reflects the harsh reality of the pandemic economy – a case of changing supply and demand. In March and April, when retailers were overwhelmed with customers and workers called in sick or quit, companies had to encourage employees to stay on the job.

But when the additional unemployment benefits, totaling $ 600 a week, expired at the end of July, many more Americans need jobs, making it easier for retailers to attract and retain workers. .

Public attention has also waned, as media reports of workers sick with the virus faded and attention shifted to protests against police violence and elections. “The headlines have moved on,” Ms. Kinder said.

But the risks to retail workers have not been. As the number of new infections hits daily records, retail workers must spend hours indoors, dealing with customers who may refuse to wear masks or wear them incorrectly. Much of that burden fell on female, black and Hispanic employees, who make up a significant proportion of retail employees.

The International Union of United Food and Commercial Workers, which represents nearly one million grocery workers, said 108 of its grocery workers have died from Covid-19 and more than 16,300 had been infected or exposed to the virus.

Some government officials have tried to step in and compensate retail workers for the risks they take. But efforts to include the risk premium for frontline workers in the various rounds of federal stimulus bills have all failed, including a proposal by Senator Mitt Romney, a Republican from Utah.

Calling it “Patriot Pay,” Romney had proposed that essential workers receive increases of up to $ 12 an hour from May through July. This was intended to compensate for any difference between what workers would earn at work and what they would receive in additional unemployment assistance. Mr. Romney’s proposal was never approved and Congress remains at an impasse on a new round of stimulus.

Other issues may prevent retailers from continuing to offer pay raises in the event of a pandemic. Even temporary increases, ostensibly limited to the extraordinary circumstances of 2020, can set expectations for higher pay on a permanent basis. Some analysts say retailers opt for bonuses over increases because they can be handed out randomly and don’t normalize higher wages.

But a few large retailers have increased their wages. Best Buy, which offered an “appreciation wage” to frontline workers by the hour starting in March, raised its starting rate for American employees to $ 15 an hour on August 2, the day after the end of additional remuneration.

The Home Depot said on Tuesday it would move from paying a temporary weekly bonus to associates in stores and warehouses to a permanent wage increase for its frontline workers. It is not known how generous these increases will be for each worker. The company, which noted average salaries varied across the country, said it would invest $ 1 billion on the increases on an annualized basis.

The momentum behind increasing wages in the retail sector appears to have gathered pace during the pandemic. Unions representing retail workers say they are encouraged to push for significant wage increases as they enter into various contract negotiations over the coming year, bolstered by what they see as the new appreciation of the public traders for low-wage workers.

In Florida, where President Trump won this month, more than 60% of voters supported a measure that will raise the state’s minimum wage to $ 15 an hour from $ 8.56 by 2026. And several polls conducted during the pandemic show growing support from Democrats and Republicans to raise the minimum wage.

Salary increases related to the pandemic have been relatively modest, but raising wages by a few dollars an hour can represent a big increase in the take-home pay of a retail employee. Kroger gave a raise of $ 2 an hour from late March to mid-May and gave employees a bonus of $ 150 or $ 300, depending on their part-time or full-time status. In May, he offered a separate bonus of $ 200 or $ 400.

Ollie’s Bargain Outlet, a discount chain of around 370 stores that has seen its sales and profits skyrocket, said on a recent earnings call that it had stopped its ‘premium salary’ of $ 1.50 per hour for frontline associates at the end of the second quarter and change it to a monthly “discretionary bonus” type.

In the absence of federal action, some states have allocated funds they received under the giant stimulus package, known as the CARES Act, to frontline workers.

In Vermont, retailers are being urged to apply for state grants that can benefit their workers who remained on the job during the pandemic. Companies like CVS and Shaw’s, a regional grocery chain, have signed up for the grants, according to the state. Employers pass the money on to the workers, acting only as conduits.

But some retailers – who fear they will be seen as accepting aid instead of struggling businesses – have barred their workers from accessing the money, confusing state lawmakers.

Tim Ashe, president of the Vermont Senate, which proposed the grants, said it meant many local workers would go without a substantial check – totaling up to $ 2,000.

“Imagine your manager telling you that the company won’t fill out paperwork that could net you $ 2,000,” said Ashe.

Dollar General, which reported second-quarter operating profit of $ 1 billion, is one of the retailers refusing the state’s offer to compensate its employees for weathering the pandemic. Mr Ashe said the state official overseeing the program told him that Dollar General “seemed totally indifferent”.

A spokesperson for the company first said that Dollar General would not apply for the grants because “we believe these limited funds should support the small business community,” but then said on Wednesday that the company was looking to apply.

Dollar General said on Tuesday that it had spent $ 73 million on bonuses for employees and planned to spend an additional $ 100 million this year, double what it originally planned.

“To demonstrate our continued gratitude and support to our employees who directly serve our customers and communities during this pandemic, we are proud to double our initial plans for second half bonuses,” said Dollar General CEO Todd Vasos , in a press release.

By comparison, Dollar General spent $ 602 million to buy back its shares in the second quarter and authorized the purchase of an additional $ 2 billion in shares.

Walmart, which operates six stores in Vermont employing hundreds of workers, initially refused to apply for the grants. Like Dollar General, Walmart first told Vermont officials that the money should go to small businesses. But on Tuesday, a Walmart spokeswoman said the company had changed its mind.

“After further discussions with local and state officials, we are pleased to hear that there is sufficient funds to provide bonuses to all small and medium-sized businesses in Vermont and that there are funds remaining for employees of Vermont. large companies, ”said the spokesperson.

In total, Walmart spent $ 1.1 billion in bonuses rewarding its employees who worked during the pandemic. Full-time workers received a series of three cash payments of up to $ 300 each. Walmart paid workers a bonus in September linked to the store’s performance, but did not say whether additional bonuses linked to the pandemic would be granted.