Economy

Virus Cases Rise, but Hazard Pay for Retail Workers Doesn’t

With coronavirus cases rising across the country, retailers are preparing for another rush from shoppers worried about new lockdowns and pandemic shortages.

But many retail workers, heralded as heroes during the first wave of the pandemic, are not being provided with the same level of bonuses and raises this time, even as the health risks for them increase. Even as some companies have announced new hazard pay in recent days, some industry observers say many retailers are not sharing enough of the profits they have earned during the pandemic with their workers, but are instead benefiting shareholders through stock buybacks.

Amazon, which said last month that its quarterly profit had increased nearly 200 percent, ended its $2-an-hour pay raise for workers earlier this year and then provided a pandemic-related bonus in June, but a spokeswoman said no new hazard pay was planned.

Walmart, which reported another big increase in quarterly sales on Tuesday, had paid a series of special cash bonuses, but the company has not raised wages broadly as a way to reward workers during the pandemic.

The grocery chain Kroger offered raises at the start of the pandemic and bonuses through mid-June, but those have ended. Employees nationwide have staged protests outside stores asking Kroger to reinstate the pay, especially given its booming business — sales are soaring, and it recently said its 2021 business results “will be higher than we would have expected prior to the Covid-19 pandemic.” This week, the company told workers that they would receive discounts at its fuel centers and a $100 store credit as a “holiday appreciation.”

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

“We ask workers with the least to sacrifice the most, and they are not even getting compensated in return,” said Molly Kinder, a fellow at the Brookings Institution, who is preparing a report that ranks which largest retailers have been most generous to their workers during the pandemic. “The companies have the money to do this.”

ImageKroger offered raises at the start of the pandemic and bonuses through mid-June, but those have ended.
Credit…Andrew Spear for The New York Times

The issue of hazard pay for retail workers reflects the harsh reality of the pandemic economy — a case of shifting supply and demand. In March and April, when retailers were overrun with customers and workers were calling in sick or quitting, the companies needed to give incentives to 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 needed jobs, making it easier for retailers to attract and retain workers.

The public attention has also waned, as news media accounts of workers getting sick from the virus faded and focus turned to protests over police violence and the election. “The headlines have moved on,” Ms. Kinder said.

But the risks to retail workers have not. As the number of new infections hits daily records, retail workers must spend hours inside, dealing with customers who may refuse to wear masks or wear them incorrectly. A large part of this burden has fallen on female, Black and Hispanic employees, who make up a sizable proportion of retail workers.

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

Some leaders in government have tried to step in and compensate retail workers for the risks they are taking. But efforts to include hazard pay for frontline workers in the various rounds of federal stimulus bills have all failed, including a proposal from Senator Mitt Romney, a Utah Republican.

Credit…Charlotte Kesl for The New York Times

Calling it “Patriot Pay,” Mr. Romney had proposed that essential workers receive raises of up to $12 an hour from May through July. That was meant to make up for any difference between what workers would earn on the job and what they were receiving in additional unemployment assistance. Mr. Romney’s proposal was never approved, and Congress remains at a stalemate over a new round of stimulus.

There may be other issues preventing retailers from continuing to offer pandemic pay raises. Even temporary raises, ostensibly limited to the extraordinary circumstances of 2020, can set expectations for higher pay permanently. Some analysts say retailers opt for bonuses instead of raises because they can be given out at random and do not normalize higher pay.

But a few big retailers have increased wages. Best Buy, which offered “appreciation pay” to hourly frontline workers starting in March, raised its starting rate for U.S. employees to $15 an hour on Aug. 2, the day after the additional pay was set to end.

Home Depot said on Tuesday that it would transition from paying a temporary weekly bonus to associates in stores and warehouses to permanently increasing wages for its hourly frontline workers. It’s not clear how generous those raises will prove for each worker. The company, which noted that average wages varied across the country, said it would invest $1 billion on the raises on an annualized basis.

The momentum behind higher pay in the retail industry appears to have picked up during the pandemic. Unions representing retail workers say they feel emboldened to push for significant pay increases as they enter various contract negotiations over the coming year, bolstered by what they see as the shopping public’s new appreciation for low-wage workers.

Credit…Jim Wilson/The New York Times

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

Pay bumps tied to the pandemic have been relatively modest, but raising wages a few dollars an hour can amount to a large increase in a retail worker’s take-home pay. Kroger gave a $2-an-hour pay raise from the end of March to mid-May and gave employees a bonus of $150 or $300, based on their part- or full-time status. In May, it offered a separate bonus of $200 or $400.

Ollie’s Bargain Outlet, a roughly 370-store discount chain that has seen its sales and earnings boom, said on a recent earnings call that it stopped its “premium pay” of $1.50 an hour for frontline associates at the end of the second quarter and would replace it with some type of monthly “discretionary bonus.”

Absent federal action, some states have allocated funds that they received as part of the giant stimulus package, known as the CARES Act, to frontline workers.

In Vermont, retailers are invited to apply for state grants that can benefit their workers who have stayed 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. The employers pass the money through to the workers, acting only as conduits.

But some retailers — wary of being perceived as accepting aid in place of struggling businesses — have blocked their workers from accessing the money, baffling state lawmakers.

Credit…Andrew Spear for The New York Times

Tim Ashe, president of the Vermont Senate, who proposed the grants, said it meant many local workers would go without a substantial check — totaling as much as $2,000.

“Imagine being told by your manager that corporate won’t fill out the paperwork that could get you $2,000,” Mr. Ashe said.

Dollar General, which reported $1 billion in operating profit in the second quarter, is one retailer that is turning down the state’s offer to compensate its employees for working through the pandemic. Mr. Ashe said the state official overseeing the program had told him that Dollar General “seemed completely uninterested.”

A company spokeswoman initially said 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 employee bonuses and planned to spend an additional $100 million this year, twice what it had initially planned.

“To demonstrate our ongoing gratitude and support for our employees directly serving our customers and communities during this pandemic, we are proud to double our initial plans for second-half bonuses,” Dollar General’s chief executive, Todd Vasos, said in a statement.

By comparison, Dollar General spent $602 million repurchasing its stock in the second quarter and has authorized the purchase of an additional $2 billion in stock.

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

Credit…William Widmer for The New York Times

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

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

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