Essential workers' 'hero pay' curtailed

Nearly every day for the past four months, Eddie Quezada has followed the same routine.

When he returns home from his job managing the produce section at a Stop & Shop store on Long Island, he strips off his clothes on the porch and immediately deposits them in the wash. The coronavirus, which infected Quezada and several co-workers, still feels like an ever-present threat.

But this month, Stop & Shop ended a 10% pay raise that it had been providing to Quezada and about 56,000 other employees since the start of the pandemic as an acknowledgment that their work was essential and appreciated.

"What we are doing is still very risky," said Quezada, 49. "We should get at least something for that."

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Stop & Shop is the latest retailer to end raises that it gave out at the height of the pandemic, when grocery and pharmacy workers became celebrated alongside health care workers for their courage and commitment in showing up to work each day. Amazon, Kroger and Albertsons have also quietly ended pandemic hourly pay raises, though some companies continue to give out bonuses. ShopRite said it planned to end its $2-an-hour raise early next month.

Many of the retailers said the extra hourly pay -- which some referred to as "hero 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, because the panic-buying has ebbed.

"As states continue to reopen, we are returning to pre-COVID levels of traffic and demand," Stop & Shop said in a statement.

The hoarding may be over but the pandemic is not. Dozens of states are enduring record levels of new infections. In the Northeast, where new infections are waning, states are bracing for a second wave of the virus.

In many ways, the job of the essential retail worker has become more difficult since the start of the health crisis. Employees are now taking on new roles like having to remind both customers and colleagues to wear masks in stores, which has led to some heated and even violent confrontations.

But while the health threats and other challenges for workers remain, the economics for their employers have changed during the pandemic.

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 that retailers were incurring to upgrade their stores with Plexiglas barriers and provide masks and hand sanitizer to workers. It also helped pay for pay raises for 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. Recently, Walgreens said labor costs and frequent store cleanings increased overall expenses and contributed to a loss in the third quarter. The company, which gave full-time workers 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 their meals at home.

Last month, Kroger said its quarterly operating profits rose 47%, 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 instead 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 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 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, Sen. Elizabeth Warren, D-Mass., 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 this month, retailers are likely to find a larger pool of applicants, making pay raises less needed to recruit workers.

"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 UFCW. "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 stores 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 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, 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 multibillion corporation. They have the money."

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