Wage Hike Leads to Stores Closing

By: 
Katherine Clements

Two large chain grocery stores will shut down in Long Beach on April 17 due to the $4 per hour wage increase unanimously approved by the Long Beach City Council on Jan. 19. The wage increase directly affects 15 stores in Long Beach and will last for 120 days. It began immediately following the approval of the ordinance.

Ralphs at 3380 N. Los Coyotes Diagonal and Food 4 Less at 2185 E. South Street are two “underperforming” stores that will endure closure as a result.

The decision to close the stores was announced by the Kroger company on Jan. 25 following the mandate’s approval.

“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 close long-struggling store locations in Long Beach permanently,” announced Kroger, a company with a net worth of $22.7 billion.

The announcement continued with, “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.”

Kroger argues that their company has been attacked. Not all grocery stores are required to implement the wage bump, only stores with more than 300 employees nationwide,

“The irreparable harm that will come to employees and local citizens as a direct result of the City of Long Beach’s attempt to pick winners and losers, is deeply unfortunate. We are truly saddened that our associates and customers will ultimately be the real victims of the City Council’s actions.”

On Wednesday, Jan. 20, the California Grocers Association announced that it had filed a federal lawsuit against the City of Long Beach, arguing that implementation of hazard pay is unconstitutional. The CGA argues that the ordinance impedes the collective bargaining process, which allows for the discussion of wages between the company and an organized body of employees.

Mayor of Long Beach, Robert Garcia, has shown his support on Instagram, using social media to share posts of himself protesting with grocery store workers and captioning his post with, “Proud to stand with grocery workers who deserve hazard pay.”

Garcia has also utilized Twitter, sharing tweets like, “When large corporations make record profits and double their earnings – they need to share that success with those providing the labor. Period.”

Kroger has realized a $2 billion profit since March of 2020, but it has been more than 267 days since they ended their first and only “hazard pay,” a $2 increase to their minimum wage base.

Long Beach isn’t the only city to increase the minimum wage. Los Angeles and Santa Clarita have drafted a $5 increase, and Oakland County has already passed the draft proposal.

Locals are expressing their opinions. Long Beach resident Allie Emmons says, “I think it’s a huge slap in the face. They’re asking their workers to come to work each day in a place that hasn’t had the option to close down during a global pandemic because they’re essential but decide to close the stores because they don’t want to increase their pay.”

Phillip Ranalli’s stated his countering opinion by saying, “The only way to combat lower gross sales is to have a much better margin percentage. A $4 an hour increase is likely equivalent to a 30 percent payroll increase. That’s very substantial.”

A member of the CGA stated Monday that the $4 increase would amount to a 28 percent increase in labor costs.

Mayor Garcia continues to stand behind the issue, saying, “These folks that are working at these markets and these grocery stores are heroes. They have received this type of additional pay in the past, and if they deserved it in the past, they deserve it today.”

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