Retailers cut ‘hero’ pay raises for many essential workers
Many retailers across the country have quietly stopped providing their workers with the pay raises they had dispensed at the start of the pandemic, despite surging virus numbers in many states.
The companies’ rationale for cutting back on this so-called hero pay is that the panic-buying that flooded stores during the early weeks of the crisis has waned.
Stop & Shop is the latest retailer to make such a move, ending a 10% pay raise it gave its 56,000 employees this spring to acknowledge that their work was essential and appreciated. Amazon, Kroger and Albertsons have also ended pandemic hourly pay raises, though some of them continue to give out bonuses. ShopRite said it planned to end its $2-an-hour raise early next month.
But while hoarding may be over, infection remains a real threat, especially in environments like retail stores, where, even with masks and social distancing measures, workers say they still feel vulnerable.
As dozens of states endure record levels of new cases, many employees say the job of the essential retail worker has actually become more difficult than at the start of the health crisis.
The politicization of mask-wearing has not helped. Store employees now risk heated and even violent confrontations when they remind customers and colleagues alike to cover their faces.
Many of the retailers said the extra hourly pay was meant to reward employees while they worked through months of wildly surging sales. But lately, there is less reason for the large raises, the companies said.
“As states continue to reopen, we are returning to pre-COVID levels of traffic and demand,” Stop & Shop said in a statement.
And that has changed the economics for employers, even as the health threats and others challenges for workers remain.
In the early weeks of the virus, panic-buying generated record sales for retailers selling food, health care products and other essential goods.
Those surging sales helped offset the costs retailers were incurring to upgrade their stores with plexiglass barriers and provide masks and hand sanitizer to workers. It also helped pay for pay raises for current employees and to recruit new workers to keep up with the crushing demand.
But a more sobering financial reality is setting in for some companies. On July 9, Walgreens said labor costs and frequent store cleanings increased overall expenses and contributed to a loss in the third quarter. The company, which had provided full-time workers with a $300 bonus in early April, has not announced plans to provide any additional bonuses and is focused instead on cutting costs.
For some grocery chains, business may no longer be hitting records. But sales are still booming as Americans continue to eat nearly all of their meals at home.
Last month, Kroger said its quarterly operating profits rose 47%, to $1.3 billion. The grocery chain ended its $2-an-hour pay raise enacted in the early weeks of the pandemic. But it recently paid bonuses to employees “to acknowledge their dedication to maintaining safe, clean and stocked stores,” Kroger said in a statement.
Amazon, and its Whole Foods unit, had been paying store and warehouse workers an additional $2 an hour. Amazon ended those raises and has opted to give out bonuses, as high as $500, last month.
Target paid its workers an additional $2 an hour through July 4 and then gave all workers in its stores a $200 bonus. Target also said it was raising its starting wage to $15 an hour, though that was something the retailer had committed to do this year before the pandemic.
Instead of raises, Walmart paid special bonuses in April and late last month and is planning another round for September.
Union officials say ending the raises hurt parttime workers the most because they have tended to receive smaller bonuses.