California City Signs Ordinance to Increase Pay of Grocery Employees, Puts Them Out of Work Instead
Two grocery stores in Long Beach, California, are now expected to close due to an unintended consequence of a city ordinance.
Kroger will be closing a Ralphs and a Food 4 Less, as they cannot afford the additional $4 an hour “hero pay” for each employee, KTLA-TV.
A Long Beach city ordinance signed last month by Democratic Mayor Robert Garcia requires hourly workers in high-risk fields to get the wage hike for at least 120 days.
“Taking a moment in-between watching inaugural events to sign a $4 an hour pay increase for grocery and supermarket workers,” Garcia tweeted on Jan. 20.
“You have earned this hero pay. Thank you for your hard work.”
Taking a moment in-between watching inaugural events to sign a $4 an hour pay increase for grocery and supermarket workers. You have earned this hero pay. Thank you for your hard work. pic.twitter.com/sZhbsukYME
— Robert Garcia (@RobertGarcia) January 20, 2021
Kroger decided that the bill, which could be seen as a micro-experiment for significant minimum wage hikes, was the last straw.
“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.
While it is clear that Garcia and the city council had positive intentions, it certainly had the opposite effect on these hardworking employees.
The grocery company originally had a $2 pay raise for their front-line workers, but ended the program in May, according to CBS News.
To recognize our associates’ hard work, we’re providing a Hero Bonus – a $2 premium above their standard base rate of pay to hourly frontline grocery, supply chain, manufacturing, pharmacy and call centers. Learn more: https://t.co/IBw5kyTXqZ pic.twitter.com/sBcrXfrUE5
— Kroger (@kroger) April 1, 2020
California currently has one of the highest minimum wages in the country, already putting a strain on small and large companies alike.
Kroger is closing two stores in Long Beach CA after a law passed mandating an additional $4/hr in hazard pay for grocery workers.
Kroger had roughly doubled its profits thru 3 quarters last year.
Kroger also authorized a $1 billion stock buyback program https://t.co/IJI7pDKKtV
— Dave Jamieson (@jamieson) February 2, 2021
A discussion about raising the federal minimum wage is usually dominated by the notion that millions of Americans would be lifted out of poverty, but many forget that millions may also lose their jobs and sink into poverty as well.
It’s long past time to raise the minimum wage, so hardworking people earn at least $15 an hour.
I hope that Democratic control of the House and Senate will ensure prompt action to get it done.
— Joe Biden (@JoeBiden) January 12, 2021
Even though it may be a small example, dozens of people that worked at these grocery store locations will now have to enter a poor job market because of unnecessary government intervention.
The next time a politician suggests any outside increase of an hourly wage, do not forget this example in the Golden State.
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