Why Worker Hazard Pay Has Not Increased During Pandemic

Why Worker Hazard Pay Has Not Increased During Pandemic

Hazard Pay
Tahsha Sydnor stows packages into special containers at an Amazon warehouse in Goodyear, Ariz., March 16, 2020, (AP Photo/Ross D. Franklin, File)

As coronavirus cases skyrocket towards the third peak of the U.S. pandemic, health risks increase among retail workers for whom exposure is a full-time job.

However, many retail workers are not getting the hazard pay bonuses and raises they received earlier in the outbreak when public attention was focused on stores that were deemed essential.

The country’s 50 million frontline essential workers are among the most vulnerable as the U.S. tracks toward as many as 500,000 covid-19 deaths by the end of February, according to the nonprofit public policy organization Brookings.  

Nearly 19 million frontline essential workers earn less than $15 an hour.

“We work around 600 people a night in a packed environment,” said Daryll Cox, a poultry plant worker in Virginia who earn less than $15 an hour. “You just have to pray and believe and hope that the person that you’re working next to is not infected.”

Workers at his plant typically make $12 to $14 an hour, said Cox, who was interviewed in the summer by Brookings. Even a small hazard pay increase would make a difference, he said.

“To be in this environment with all the money that we know the company makes, I don’t think it would set back the company at all to at least show us appreciation by giving us a $2 to $3 raise.”

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The House of Representatives passed legislation in April to create a $200 billion hazard pay fund. Dozens of large companies also offered small, temporary hourly pay bumps and bonuses to frontline workers.

Seven months later, the hazards of covid-19 are getting worse but few frontline essential workers — described as heroes during the first wave of the pandemic — are receiving any hazard pay at all.

Many large retail companies are reporting record sales, off-the-chart profits and soaring stock prices while ending temporary pay raises months ago.

Some industry observers say many retailers are benefiting their shareholders through stock buybacks but are not sharing enough of their profits earned during the pandemic with their workers, according to the New York Times.

Amazon, which in October reported almost 200-percent quarterly profits, ended its $2-an-hour pay raise for workers earlier this year and then provided a pandemic-related bonus in June, New York Times reported. No new hazard pay is planned, a spokeswoman said.

Walmart, which last week reported another big increase in quarterly sales, has paid a series of special cash bonuses, but the company has not raised wages broadly during the pandemic.

Retailers opt for bonuses instead of raises because they can be given out at random and do not normalize higher pay, some analysts say. Even temporary raises can set expectations for permanent higher pay.

Grocery chain Kroger offered raises when the pandemic began and bonuses through mid-June, but they’ve ended. Employees protested outside stores asking Kroger to reinstate the hazard pay, arguing business was booming. The company said 2021 business results “will be higher than we would have expected prior to the Covid-19 pandemic.” This week, the company told workers that they would receive discounts on gas and a $100 store credit as a “holiday appreciation.”

Lowe’s said in its quarterly earnings report that it had already paid more than $800 million in pandemic-related benefits to employees. However, the company expects to buy back about $3 billion of its own stock in the Q4 after spending about $1 billion on buybacks and dividends in Q3.

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Best Buy is one of the few big retailers that increased wages. It offered “appreciation pay” to hourly frontline workers starting in March and raised its starting rate for U.S. employees to $15 an hour on Aug. 2, the day after the additional pay was set to end, NYT reported.

Home Depot said it would transition from paying a temporary weekly bonuses to workers in stores and warehouses to permanently increasing wages for its hourly frontline workers. 

Public policy organization Brookings recommends that profitable companies should reinstate hazard pay and permanently raise wages to $15 an hour. It also calls on Congress to include federal funding in the next federal relief bill for hazard pay targeted to the low-wage workers who need it most for the duration of the pandemic.

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