The L.A. Board of Supervisors voted 4 to 1 to pass the “hero pay” ordinance on Monday and Santa Monica City Council is likely to do the same.
The board ruling requires large grocery and drug retailers in unincorporated L.A. County to compensate employees an extra $5 an hour for the next 120 days. This “hazard pay” is in response to both the business boost stores received during the pandemic and health risks their employees face.
Supervisors first proposed the pay boost in January and City Council unanimously agreed to pass a temporary hero pay ordinance once the Board of Supervisors finalized their proposal.
Since then there has been more push back around hero pay.
Two Long Beach Kroger stores closed in response to local hero pay regulations. The California Grocers Association filed federal lawsuits against the cities of Long Beach, Montebello, and West Hollywood alleging that their hero pay mandates are unconstitutional.
Councilmember Kevin McKeown said he is undeterred and wants to see Santa Monica take action as soon as possible.
“Because County action to acknowledge the grocery and drugstore workers who keep our families fed and healthy was delayed a month, I hope Santa Monica can implement hero pay as soon as possible after the Board of Supervisors,” said McKeown. “The Council’s unanimous vote in early January authorizes an emergency order, or a local ordinance, or both.”
The Board of Supervisors ordinance targeted large chain stores and McKeown said Santa Monica’s motion would do the same.
The County’s hero pay mandate specifically applies to publicly traded chain stores or stores with at least 300 workers nationwide and more than 10 per store.
The controversy around hero pay centers on whether these retail stores can reasonably absorb the wage hike. Detractors say they cannot and will inevitably pass on the cost by shutting down, raising prices, cutting hours, or firing employees.
Supervisors Solis, Mitchell, Kuehl, and Hahn all supported the ordinance while Supervisor Barger was the sole dissenting vote.
Supervisor Barger said it is unfair to specifically target grocery and drug store employees, while ignoring the sacrifices of other frontline workers and voiced concern over unintended negative effects for stores and workers.
“I would hate to think that we’re driving the very businesses that we fought so hard to locate in unincorporated areas, many of which are in our working-class neighborhoods, out of business, or worse employees losing hours or possibly their job,” said Barger, who also noted that grocery stores typically report a 2.2 percent profit margin.
The motion, which was co-authored by Mitchell and Solis, cited a study by the Brookings Institute that found that in 2020 top grocery retailers saw a 40 percent increase in profit averaging $16.7 billion in additional profits.
“Grocery and drug retail employees have continued to report to work and serve our communities, despite the ongoing hazards and dangers of being exposed to COVID-19,” said Solis. “Many are working in fear and without adequate financial support, while their employers continue to see profits grow and top executives receive steep pay bonuses.’’
Clara@smdp.com
