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OAKLAND – Employees at large Oakland grocery stores will receive a $ 5 an hour increase after city council unanimously passed an emergency ordinance on Tuesday mandating the “risk premium” until the coronavirus pandemic calms down.
Oakland joined Long Beach, Seattle, and Santa Monica in taking this step. Other cities, including Berkeley, San Jose and Los Angeles, are considering similar actions, which have been urged by workers and their unions but condemned by the retail grocery industry.
“We can help make the lowest paid essential workers pay at a time when companies are reaping profits,” said Oakland board chairman Nikki Fortunato Bas, who introduced the ordinance with board member Noel. Gallo, at the council meeting.
The emergency order applies immediately to large grocery stores – which it defines as “15,000 square feet … which (sell) primarily household groceries” and employ 500 or more people across the country. These stores in Oakland include Cardenas Markets, Safeway / Albertsons, Save Mart, Target, Trader Joe’s and Whole Foods, according to a memo from the city.
Many grocery stores raised the wages of workers in the first months of the pandemic, but most stopped doing so afterwards. Lucky Stores continued to pay the risk premium, and Trader Joe’s announced Monday that it would increase its coronavirus-related “thank you” pay increases from $ 2 an hour to $ 4 an hour above employee base.
According to a study by the Brookings Institution, a Washington, DC-based think tank, some of the country’s 13 largest retail companies saw their profits soar 40% in 2020 from the previous year and realized together averaged $ 16.7 billion in additional profits. At Albertsons Co., which owns the Safeway grocery chain, profits for the first two quarters of 2020 were up 153% compared to the same period in 2019, according to the report.
Yet frontline workers saw little of this money. Companies studied by the Brookings Institution have increased the wages of their frontline workers by just $ 1.11 an hour on average since the start of the pandemic.
Workers and their advocates say that must change, especially as cases of COVID-19 have continued to rise at the highest level since the start of the pandemic.
Several grocery store workers and advocates spoke in favor of the order during the public comment portion of the meeting, as well as in written statements to Bas’s office.
“The risk premium means additional remuneration for performing hazardous tasks or work involving physical difficulties. Working in the grocery store is now dangerous work and the physical challenges are illness and death, ”said Devin Ramos, a 23-year-old Oakland Safeway employee. “My work day in a busy store puts me in close contact with hundreds of customers every day, and I have no realistic way of gaining social distance in the line of duty. I have no way of making all customers who come into my store wear a mask or preventing them from removing their masks. “
Melody Neal, an employee of Lucky, pointed out that the risk premium helps employees keep working, prompting them to take jobs that have become much more difficult during the pandemic.
“What we usually do once or twice a day, we do it three to four times a day. The lines are long. People are frustrated and stressed, ”said Neal, 37.
Representatives of the grocery industry have complained that the Oakland ordinance and others like it in the state and country are overbreadth and an unfair burden on retail stores.
“The additional compensation mandates will have serious unintended consequences not only for grocers, but also for their employees and customers,” said Ron Fong, president and CEO of the California Grocers Association. “An additional compensation mandate of $ 5 (per hour) equates to a 28% increase in labor costs. It’s enormous. Grocers will not be able to absorb these costs and negative repercussions are inevitable. “
Fong said grocers would be forced to pass the additional costs on to consumers by raising prices.
In California, it is illegal to increase the price of food, consumer goods, or medical and emergency supplies by more than 10% of what a seller charged for that item on February 4, 2020, when the pandemic was only just beginning.
The association filed a federal lawsuit against Long Beach, the first city to introduce a risk premium order. The lawsuit argues that the Long Beach risk premium order is unconstitutional because it targets grocery stores rather than other industries and interferes with federal labor law that protects the collective bargaining process.
Fong told the news organization in an interview on Friday that the association would consider filing lawsuits against other cities considering similar orders.
Miya Saika Chen, chief of staff to the chairman of the board, said the ordinance would not affect employers with collective agreements that waive its provisions. It also allows employers who already offer a risk premium to use that amount as a credit to reach the $ 5 per hour premium. A store that currently offers $ 2 an hour on top of the base pay, for example, would only have to add $ 3 more.
Oakland’s proposed ordinance would end when the Bay Area is determined by the state to be a “minimal risk” level, or the yellow level, according to California’s color-coded risk assessment model.
Oakland City Administrator Ed Reiskin stressed in Tuesday’s meeting that the city department responsible for enforcing workplace standards does not have the capacity to take on the extra work. responding to questions, monitoring compliance with the order, and investigating complaints.
Chen pointed out that the order has a private right of action option, so employees can file a notice in court if their employers violate the order.
Board member Gallo cited earlier outbreaks this year at Cardenas Market in Oakland, where several employees have tested positive for COVID-19, noting that grocery store workers are at greater risk of contracting the disease than those who can work from home.
“We need to recognize workers, address their health needs and make sure they have the compensation to continue,” he said.
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