On March 3rd, the Los Angeles City Council voted to place a “Hero Wage” mandate on all grocery stores, pharmacies, and big-box retail stores with ten or more non-managerial employees. Employers are now required to pay all non-managerial employees an extra $5.00 per hour for “hazard pay.”
This means that a grocery store suddenly will have an extra $200 per forty-hour full-time employee per week. Not to mention, they will have to pay more in employment taxes as well.
The justification for the mandate is that these are people who worked through the pandemic and are deserving of more money because they are “heroes.” The origin of this stems, in part, from the $600 bonus “Federal unemployment” stimulus benefits that people received if their workplace shut down. For lower-wage workers, those who were unemployed generally made more money than the ones still employed. A person making $12 per hour, whose job shut down due to the lockdown, received roughly $21 per hour with regular unemployment and the Federal unemployment stimulus checks.
LA City Council also turned it into a “social justice” issue, claiming that since lower-wage workers tend to be Black or Latino, the rest of the population owes them something. One LA City Council member also falsely claimed that grocery store workers in the city were making minimum wage. The minimum wage in California is $12 per hour, but low-level workers in LA make substantially more than that. The average wage of a Los Angeles grocery store worker is $17.25.
Unincorporated Los Angeles County also passed the same mandate, and Long Beach, Californian, passed a $4 mandate last February 2nd.
Since the passing of the $4 mandate in Long Beach, two grocery stores announced they would close permanently in April. A Ralphs, and a Food4Less.
The California Grocers Association has also filed a lawsuit against Long Beach, challenging the mandate.
Since March 3rd, three more grocery stores in Los Angeles have already announced that they will also be closing.
Meanwhile, Seattle also passed a $4 mandate in February, and two Quality Foods locations have announced they are closing.
Besides, poor performing stores simply closing down, other stores are expected to freeze hiring, cut their total number of employees, cut hours for employees, and cut store hours.