By Jaewon Kang and Sharon Terlep
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 20, 2020).
Some of the biggest U.S. retailers are ending the extra pay they
gave to front-line workers as coronavirus-related costs pile up and
the ranks of jobless Americans surge, tipping the labor market in
employers' favor.
Amazon.com Inc., Kroger Co. and Rite Aid Corp. are among the
major companies that have ended or plan to stop paying higher wages
for tens of thousands of workers in stores and warehouses and on
the road.
Workers and unions are pushing back, saying they still face
extra risk at work.
"As long as we are wearing gloves, as long as we are wearing
masks and social distancing, it seems obvious to me that we are
working in hazardous circumstances," said John T. Niccollai,
president of United Food & Commercial Workers Local 464A, based
in Little Falls, N.J. "It is manifestly unfair to eliminate the
hazard pay at this point."
As the Covid-19 pandemic spread in the U.S., many grocers,
drugstore chains and essential retailers introduced a temporary $2
hourly increase, a one-time bonus or both. Now some are curtailing
that pay as they grapple with rising expenses and expectations of a
U.S. recession.
For retailers, labor has already become expensive as minimum
wages climbed in recent years. Adding to costs are new needs, such
as securing protective equipment for staff and spending more to
sanitize stores and distribution centers. Home Depot Inc. said
Tuesday it spent $850 million on extra pay, benefits and safety
measures in its latest quarter.
At the same time, more than 36 million Americans have filed for
unemployment since March, creating a new talent pool for employers
with large hourly staff and high turnover. In recent months,
Walmart Inc. and Amazon have hired more than 400,000 people.
Amazon is offering extra pay for warehouse workers through the
end of May, instead of ending the practice on May 16 as originally
planned, and will return to regular wages in June. The e-commerce
giant has been paying warehouse and delivery workers an additional
$2 an hour, along with double overtime pay, since mid-March. An
Amazon spokeswoman said the company viewed the extra pay as an
incentive rather than hazard pay.
Kroger extended a $2 hourly wage increase one final time to May
23 and offered a one-time payment of $400 for full-time staff and
$200 for part-time staff. The special pay was set to expire in
mid-May. The Cincinnati-based company said the extension will
amount to $130 million and that it has spent $700 million on
bonuses and various safety measures since March.
Pharmacy chain Rite Aid ended its $2-per-hour bonus pay on May
16, after extending it for two weeks. Competitors CVS Health Corp.
and Walgreens Boots Alliance Inc. paid bonuses rather than higher
hourly wages. CVS said it would pay a second round of bonuses in
June.
"We have been extending as needed," said Dave Hirz, chief
executive of Smart & Final Stores Inc., a chain of warehouse
food stores. His company in March introduced a $2.25 hourly wage
increase for front-line workers and plans to offer the pay at least
through the end of May.
Mr. Hirz said the increase wasn't intended to persuade staffers
to come to work but rather to thank them. Fewer employees are
calling out sick versus a year ago. Still, Smart & Final
doesn't plan to make a permanent change because the chain already
pays more than $17 an hour on average, Mr. Hirz said.
Workers and union groups are calling for retailers to extend the
hazard pay, saying they are risking their health to be at work and
will remain in risky roles throughout the pandemic. UFCW local
union groups, which represent more than 20,000 grocery workers in
Southern California, are calling on Kroger to maintain bonus pay
and improve safety practices.
Jackie Mayoral, who works at a Kroger-owned Ralphs store in
Hollywood, Calif., has been staying home since mid-April, when she
tested positive for Covid-19. She said extra pay should be extended
for grocery workers until the lockdown lifts.
"They are still putting their life on the line," said Ms.
Mayoral, 54. The grocery store is located on Sunset Boulevard, and
10% of the workforce there has tested positive. "It's a slap in the
face."
Target Corp. is extending its $2-an-hour pandemic wage increase
through July 4 for store and distribution workers. The retailer has
previously pledged to increase its $13 minimum hourly wage to $15
by the end of 2020, matching Amazon's starting wage in the U.S.
"As states start to reopen and businesses restart, we can't lose
sight of the fact that it's going to take time to work through the
pandemic," Target CEO Brian Cornell said Monday in a memo to
workers.
Walmart has been paying cash bonuses instead of raising hourly
wages. The company, which employs around 1.5 million people in the
U.S., said last week it would pay a second bonus to those employed
as of June 5. It booked about $900 million in Covid-19 expenses in
the latest quarter, but rode a surge in sales.
Skogen's Foodliner Inc., which operates the Festival Foods
grocery chain in Wisconsin, has been reviewing whether to extend
the bonus pay, but is unsure on how long. "These guys are doing
wonderful things to be working in front of people, but we don't
know," said Mark Skogen, chief executive of Festival Foods. "When
is the danger gone?"
Write to Jaewon Kang at jaewon.kang@wsj.com and Sharon Terlep at
sharon.terlep@wsj.com
(END) Dow Jones Newswires
May 20, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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