Kroger is closing two grocery stores, Ralphs and Food 4 Less, in Long Beach, California, after the city voted to require the grocery company to give employees an additional $ 4 an hour in risk costs during the pandemic.
“As a result of the City of Long Beach’s decision to pass an ordinance requiring additional pay for grocery workers, we have made the difficult decision to permanently close long-term retail locations in Long Beach,” the company said said in a statement to the press telegram. “This misguided action by Long Beach City Council goes beyond the traditional negotiation process and applies to some, but not all, grocery workers in the city.”
The ordinance passed Jan. 19 stated that any grocery store with 300 nationwide employees and 15 employees in Long Beach would have to give their employees $ 4 extra an hour for 120 days because of the coronavirus pandemic.
Kroger’s decision is unfortunate for workers, shoppers and the company, the city said in a statement.
After the ordinance was adopted, The California Grocers Association filed a lawsuit against the city, saying it disrupted the collective bargaining process.
“An increase of $ 4 / hour represents an increase of about 28 percent in grocery labor costs. There is no way grocers can absorb that big cost increase without compensation elsewhere, as grocers operate with razor-thin margins and many stores are already operating in the red, ”said California Grocers Association president and CEO Ron Fong. Long Beach City Council placed politics above families and jobs in the midst of a pandemic. This was completely avoidable. “
Other areas of California also want employers to pay a risk to their employees during the pandemic. Montebello City Council passed an ordinance similar to Long Beach, requiring large supermarkets to pay an additional $ 4 an hour for the next 180 days. The Los Angeles City Council will soon be looking at a similar proposal, the Press-Telegram reported.
The director of corporate affairs for Ralphs, John Votava, told the news outlet that it would be possible for other stores to close if these regulations are passed. “These misguided mandates could put any store in trouble closing at risk,” said Votava.
There is fighting across the country to raise the federal minimum wage. President Biden has said he supports a federally mandated minimum wage of $ 15.