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Hero’ Pay Raises Disappear for Many Essential Workers

News Source

Many retailers across the United States 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 percent 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 very 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 even 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.

“What we are doing is still very risky,” said Eddie Quezada, a produce manager at a Stop & Shop store on Long Island. “We should get at least something for that.”

Nearly every day for the past four months, Mr. Quezada has followed the same routine. When he returns home from work, he strips off his clothes on the porch and immediately deposits them in the wash. The coronavirus, which infected Mr. Quezada and several co-workers, still feels like an ever-present threat.

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 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 percent, 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 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, which represents employees at Stop & Shop and other grocery workers in New York. “It’s all about the bottom line.”

Last week, Senator Elizabeth Warren urged Stop & Shop to restore the pay raise, writing on Facebook that “the COVID-19 pandemic is not over and grocery store workers are still putting their lives on the line to keep Americans fed.”

But the workers’ leverage with their employers may be waning. The pay cuts are happening as the climate for recruiting new workers is changing.

The additional $600-a-week supplement that unemployed workers have been receiving from the federal government may be deterring some people from going back to work. With that benefit set to expire later this month, retailers are likely to find a larger pool of applicants, making pay raises less needed to recruit new employees.

“When they first put in these pay raises, the companies were afraid their workers were going to walk out the door,” said Marc Perrone, international president of the U.F.C.W. “Now there is near record high unemployment and people need jobs.”

But ending pay raises could backfire on companies that are trying to keep their store safe as coronavirus cases grow.

Cathy Maerz, who works at the deli counter at the Stop & Shop in Medford, N.Y., said some younger employees had started to resist wearing their masks after the company phased out premium pay this month.

“They are telling me, I am not wearing my mask if they are not going to give us this pay,” said Ms. Maerz, 57. “I tell them ‘it’s mandatory, you are going to get written up’ and they say, ‘I don’t care.’”

At the start of the pandemic, Ms. Maerz worked seven days a week to fill in for co-workers who were too vulnerable or nervous to come to work. The panic-buying may be over, she said, but her store is still busier than normal.

“I could understand if this was some small business, like a tanning salon, that had all this debt and couldn’t afford pay raises,” she said. “But this is a multi-billion corporation. They have the money.”

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