“Hero pay” raises disappear for many
Nearly every day for the past four months, Eddie Quezada has followed the same routine. When he returns home from his job managing the produce section at a Stop & Shop store on Long Island he strips off his clothes on the porch and immediately deposits them in the wash. The coronavirus, which infected Quezada and several co-workers, still feels like an ever-present threat.
But this month, Stop & Shop ended a 10% pay raise that it had been providing to Quezada and
about 56,000 other employees since the start of the pandemic as an acknowledgment that their work was essential and appreciated.
“What we are doing is still very risky,” said Quezada, 49. “We should get at least something for that.”
Stop & Shop is the latest retailer to end raises that it gave out during the height of the pandemic, when grocery and pharmacy workers became celebrated alongside health care workers for their courage and commitment in showing up to work each day. Amazon, Kroger and Albertsons have also quietly ended pandemic hourly pay raises, though some companies continue to give out bonuses. ShopRite said it planned to end its $2-anhour raise early next month.
Many of the retailers said the extra hourly pay — which some referred to as “hero 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, because the panic-buying has ebbed.
“As states continue to reopen, we are returning to pre-COVID levels of traffic and demand,” Stop & Shop said in a statement.
The hoarding may be over but the pandemic is not. Dozens of states are enduring record levels of new infections. In the Northeast, where new infections are waning, states are bracing for a second wave of the virus.
In many ways, the job of the essential retail worker has become more difficult since the start of the health crisis. Employees are now taking on new roles like having to remind both customers and colleagues to wear masks inside stores, which has led to heated and even violent confrontations.
But while the health threats and other challenges for workers remain, the economics for their employers have changed during the pandemic.
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 Thursday, 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, parent company of King Soopers and City Market, 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 part-time workers the most because they have tended to receive smaller bonuses.
“They got good public relations out of the raises, and now they are done,” said John R. Durso, president of Local 338 of the Retail Wholesale Department Store Union and the United Food & Commercial Workers union. “It’s all about the bottom line.”