Big companies shortchanging ‘hero’ workers

It’s not unusual for big corporate employers to pretend that the people who make their businesses go aren’t mere “employees.” They’re “associates” (Walmart and many others). Or “cast members” (Disney). Or “partners” ( Starbucks ). Or “team members” ( Best Buy ).

Lately, a new label has joined this list: “Heroes.” Kroger, the parent of the Ralphs supermarket chain and others, used the term when announcing a $2-perhour bump in the pay of its front-line workers, dubbed a “hero bonus” in recognition of the workers’ valor in staying at their posts during the coronavirus pandemic. Well, that didn’t last long. Kroger announced earlier this month that it would end the hero bonus on May 17, though it was subsequently shamed into replacing the hourly bump with a one-time “thank you” bonus of $400 for “qualified full-time associates” (there’s that word again) and $200 for part-timers.

As my colleague Suhauna Hussain reported, the “hero bonuses” and “appreciation pay” have been disappearing through this month, even as the number of new infections and deaths remained high and the hazards for consumer-facing employees may even have increased with relaxation of stay-at-home rules.

Nevertheless, raises of $3 an hour instituted by Starbucks and a $2 hourly raise at Target are scheduled to end at the end of this month, Hussein reported.

There’s no mystery about what’s going on here. Employers’ use of terms such as “associates” or “partners” is simply designed to obscure the true relationship between management and workers. These terms imply that the workers have a full voice in how the business is run and an equal claim on the profits, not to mention some semblance of autonomy.

But manifestly that’s not the case. With few exceptions, generally in union shops, these are unequal relationships in which the employer has almost all the power.

That includes political power. As we’ve observed, return-to-work policies in states such as Texas and Iowa have been backed by the coercive threat that workers will lose their unemployment benefits if they choose to stay sheltered from the coronavirus at home, or who have to care for children or other family members.

The truth is that all the capacity for choice remains in the hands of employers: They can decide whether to reopen their businesses, but if their reopenings place employees at risk, government will back the employers.

The owners of meatpacking plants, which had become hotspots of coronavirus infection in several states, won the support of the Trump administration in their desire to keep operating, sometimes in violation of local rules and good anti-virus practice. Trump on April 28 issued an executive order to allow meat processing plants to stay open under the authority of the Defense Production Act, preempting local authorities.

Let’s not overlook Tesla, whose CEO Elon Musk aggressively challenged California’s stay-at-home rules and dared local officials to arrest him for reopening the firm’s Fremont factory without clearance.

The company warned workers that they could lose their unemployment benefits if they were recalled to work but chose to stay home over COVID-19 concerns. The company did say that the status of benefits would be up to the state, not the company, however.

Musk wasn’t arrested for reopening the Fremont plant, even though he plainly flouted the law. Instead, local authorities met with Tesla executives to work out what amounted to a compromise, allowing the factory to reopen ahead of the schedule that the authorities had set down initially.

Management’s lionization of rank-and-file labor in their rhetoric and its mistreatment of workers in reality is, of course, an old story. It played out in corporate America’s response to the massive tax cut awarded businesses by a Republican Congress in December 2017.

The tax cut was ostensibly designed to give businesses capital to invest in operations and their workforces. Instead, a disproportionate share of the tax cuts went into stock buybacks, which represent capital funneled directly to shareholders.

An analysis by the Congressional Research Service published a year ago found that $1 trillion in buybacks had been announced by the end of 2018, while there was “no indication of a surge in wages in 2018 either compared to history or relative to GDP growth.”

What gains workers felt from the tax cuts generally came in the form of one-time bonuses, which have only limited and temporary impact on an employer’s bottom line, rather than hourly wage increases, which have staying power.