Now that the Seattle City Council has voted to mandate that grocery stores pay workers $4 an hour more in "hazard pay," Trader Joe's has fashioned an unusual response.
According to the Seattle Times, the retailer is instituting a temporary pay raise for all its employees around the country.
“After seeing this occur with a few cities in California and Washington we have determined that such actions are unfair for all stores throughout the Company,” the company said on its website. “Accordingly, effective February 1, we will increase our thank you pay for all Crew Members by two dollars, making the 'thank you pay' equal to $4 company wide.”
The Times writes that "the raise at, least partially, undercuts arguments from business leaders and the grocery industry that Seattle’s legislation was untenable in a business with slim profit margins."
Similar hazard pay mandates have been passed in the California communities of Long Beach and Berkeley; in Long Beach, Kroger said that it would close two underperforming stores that were made non-viable by the pay increase mandate.
Trader Joe's said, however, that it would cancel its regular mid-year pay increases because of the immediate wage hike.
- KC's View:
I always thought the idea of hazard pay was a good one, though I think that offering bonuses rather than temporary hourly pay increases would've made more sense, simply because it avoids the bad optics of taking the raises away.
I've always thought that many retailers offer lip service about how important it is to have a positive corporate culture, and that a lot of employees didn't feel essential before the pandemic, won't feel essential after the pandemic, and that this is the real problem that needs to be addressed in many companies. (I don't think Trader Joe's is one of those companies.)
But I also continue to believe that selectively forcing grocery stores to pay higher wages to store employees is bad public policy. Set a minimum wage, and then let companies make their own decisions about pay scales and benefits above that, competing with each other to be employers of choice.