Ignorant politicians should keep their hands off private business. A case in point is the grocery chain Kroger’s which had to close two California stores Saturday after the Long Beach City Council approved a COVID-19-related “hero pay” ordinance that increased wages by $4 per hour.
The pay increase, mandated in January, was for workers who were employed at pharmacies and retail stores with 300 or more employees in the Southern California city.
The move was announced earlier this year, but the Ralph’s and Food 4 Less—both operated by Kroger—were shut down on April 17, employees told local media outlets.
“As a result of the City of Long Beach’s decision to pass an ordinance mandating Extra Pay for grocery workers, we have made the difficult decision to permanently close long-struggling store locations in Long Beach,” said a spokesperson for Kroger several weeks ago. “This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city.”
Last month, Kroger also announced it would close down three stores—two Ralphs and one Food 4 Less—in nearby Los Angeles, which passed its own $5-per-hour “hero pay” boost to workers amid the pandemic.
Kroger, in a statement, said they were “underperforming stores,” while maintaining that the extra cost of temporary hazard pay made it impossible to operate.
“The hero pay mandate in Los Angeles mandate will add an additional $20 million in operating costs over the next 120 days, making it financially unsustainable to continue operating the three underperforming locations,” the firm said. “Despite our efforts to overcome the challenges we were already facing at these locations, the extra pay mandate makes it impossible to run a financially sustainable business that ensures our ability to continue serving the Los Angeles community at those three locations with reliable access to affordable, fresh groceries and other essentials.”
Very often, these stores are in poor areas and are needed by the shoppers.