Kroger closing two stores after city orders higher pandemic pay for workers

Kroger is closing two grocery stores, Ralphs and Food 4 Less, in Long Beach, Calif. after the city voted to require the supermarket company to give employees an extra $4 an hour in hazard pay during the pandemic. 

“As a result of the City of Long Beach’s decision to pass an ordinance mandating Extra Pay for grocery workers, we have made the difficult decision to permanently close long-struggling store locations in Long Beach,” the company said in a statement to the Press-Telegram. “This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city.”

The ordinance that was approved on Jan. 19 stated that any grocery store with 300 employees nationwide and 15 employees in Long Beach would have to give their employees an extra $4 an hour for 120 days due to the coronavirus pandemic. 

“Kroger’s decision is unfortunate for workers, shoppers and the company,” the city said in a statement. 

After the ordinance was approved, the California Grocers Association filed a lawsuit against the city saying it was disrupting the collective bargaining process. 

“A $4/hour increase represents about a 28 percent increase in labor costs for grocers. There’s no way grocers can absorb that big of a cost increase without an offset somewhere else, considering grocers operate with razor thin margins and many stores already operate in the red,” President and CEO Ron Fong of the California Grocers Association said. “The Long Beach City Council put politics ahead of families and jobs in the middle of a pandemic. This was entirely avoidable.”

Other areas in California are also looking to make employers pay hazard pay to their employees during the pandemic. The Montebello City Council passed an ordinance similar to Long Beach requiring big grocery stores to give an extra $4 an hour in pay for the next 180 days. The Los Angeles City Council will look at a similar proposal soon, the Press-Telegram reported.

The corporate affairs director for Ralphs, John Votava, told the news outlet that it is possible for other stores to close down if these ordinances are approved. “These misguided mandates could put any struggling store in jeopardy of closure,” Votava said.

Nationwide, there is a fight to increase the federal minimum wage. President Biden has said he supports a federally mandated $15 minimum wage.