Authored by Jazz Shaw via HotAir.com,
Back in early February, we looked at a story out of Long Beach, California where the City Council passed an ordinance requiring large, chain grocery stores to provide workers with an extra four dollars per hour as “hero pay” during the pandemic.
That immediately resulted in two of the biggest Kroger stores in the area closing their doors permanently, putting hundreds of people out of work. At the time, I noted that a number of other large municipalities in the Golden State were either already drafting or considering similar legislation.
But having seen what happened in Long Beach, they thankfully had sufficient warning not to make the same mistake.
Or so you would have thought. But as it turns out, you’d have been wrong. Los Angeles plunged ahead and passed the same type of law, only they upped the ante and made it five dollars per hour. Try not to faint from shock when I tell you that three more Kroger stores shut down in short order. If only someone could have somehow foreseen this and avoided all of these closures. (Washington Examiner)
The list of Southern California stores that have been forced to close over government-implemented “hero pay” hikes has grown to five after three more locations announced they will close their doors.
Two Ralph’s locations and one Food 4 Less location, both owned by the grocery giant Kroger, in West Los Angeles will close due in part, the company says, to a Los Angeles City Council mandate requiring some employers to provide an additional $5 per hour in hazard pay for workers on the “front-lines” during the coronavirus pandemic, according to Fox 11 Los Angeles.
“The mandate will add an additional $20 million in operating costs over the next 120 days, making it financially unsustainable to continue operating underperforming locations,” Kroger said in a news release.
Thanks to the City Council’s efforts to “help heroes” during the pandemic, 289 more people lost their jobs overnight. It’s also worth noting that these aren’t minimum wage jobs for students. Thanks to California’s generous labor laws, those grocery store workers were making an average of $18 per hour, which works out to the equivalent of $24 per hour when you include the mandatory benefits they receive. On top of that, those neighborhoods will now be without one of the larger grocery shopping options with the most diverse range of products.
The only winners here were the smaller grocery stores in those communities. Because L.A. modeled its ordinance on the one enacted in Long Beach, the rules were not applied equally. The “hero pay” requirement was only imposed on larger, national chain stores. Perhaps some of those smaller stores can hire a few of the newly unemployed clerks from Krogers.
Members of the Los Angeles City Council took another page out of Long Beach’s book, talking about the greedy chain stores and their “record profits.” But as we discussed last time, profit margins in grocery stores are just about as thin as you could imagine because of the competitive nature of the industry. When you suddenly jack up their labor costs by more than 25% overnight, the outlets immediately become unprofitable or uncompetitive. Kroger knows this and isn’t going to wait around and keep bleeding off revenue while waiting to see if the City Council comes to its senses.
This is yet another case of municipal mismanagement, as bumbling bureaucrats dream up ways to “do the right thing” during the pandemic. Sadly, they decided to start tinkering with bits of the private sector’s machinery when they clearly didn’t understand how it operates.
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Wait till the commiegress passes the $15.00 national minimum wage.
There will be a flood of store closures in less affluent places like
Kentucky and Maine,
Aside from LA and LB nationaly it’s almost as if the plan is to.kill off small business so.that the large corporations control all the retail businesses in the country, as if there was a group of oligarchs who along with political “leaders” were trying to build back better by taking total control over the economy and with it total control over the people
Sort of like resetting the economy in some great way, where we own nothing and are told to be happy about it, and do what we’re told or no fourth of July picnics or something
Grocery chains are lucky to make 1-2% profit in any given year. Payroll is their biggest expense so no one should be surprised by them laying off employees or closing altogether. Politicians have no idea how the private sector works……look at your taxes.
The local store got rid of a few lanes and put in a self checkout area.
This is what happens when incompetent people get into leadership positions in the public sector. I expect when inflation starts to grow and get painful price controls will be introduced by these same incompetent leaders.
The recently passed stimulus bill will provide State and municipal governments a short shot of revenue to operate on but will not last. Then there will be massive government worker layoffs unless we go full communist and government takes over all business activity. Judging from the last year that will probably happen.
What will happen after that is the government takeover of all private property. The takeover of all private property is something foreign to America. The government will then be able to solve the housing crisis among the poor by assigning rooms in all the former private residences to all those without a place to live.
It will be a short time utopia for all the poor while the former property owners will experience a let down as they will be assigned a room in their former estates.
Communism is the great equalizer where everyone will live the same equality. No more rich and poor; only equality in a collective hive mentality where the workers support the lifestyles of the few running the system.
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I do agree with you that government will force those in the major cities to house the poor as happened in the Soviet revolution. See, the different socialist organizations flooded the cities with the poor so that they could have an inst-mob whenever they needed one. As a reward, all single family homes were broken up into “apartments” with each new family getting part of the house.
This will be done in the cities, especially ones in California. After all, if the CDC can void contracts and implement eviction moratoriums then it can just as easily demand that you house the homeless based on health reasons.
I’ve warned friends, family and associates that still reside in California to move to a rural area so as to avoid this specific threat. After all, my business partner lives in N. Hollywood and people are camped outside on his sidewalk. I asked him how long until the authorities “force you to house those guys?” Silence.
You wont see this in the country or rural areas because it would be impossible to enforce. We really don’t have anything to burn or loot so no need for them here.
I was explaining to my family how Biden will spend like crazy at first and then reality will set in and people may actually wake up to the hosing they are experiencing.
I’ve got no problem with that. Imagine a country where small family owned businesses thrived again. This is what America needs more than anything else.
Small grocery stores cannot scale, meaning they cannot buy in the quantity that is efficient either in their warehouses or in their trucks. Dairy, for example, is a profit center for a big grocer, but for the little guy it’s a problem to buy at a level to keep distribution costs down and everything fresh. You will always see prices for everything much higher in corner stores and whatnot and far more crap food that has higher margins. Each owner has hopes for a lottery winner.
Yes, at one time even larger grocers were owned by individuals. They all sold out because the chains like Safeway, Albertsons, etc. were much more efficient and the writing was on the wall.
But if you want higher prices and better quality shop at your local Coop health food store. No profits, but they stay in business because some people will actually pay more for food that doesn’t cause disease.
I guess it all depends on whether you believe there’s a highly contagious virus out there or not. Would you want to stand in front of many people each day when the Gov. is telling you people are dying from a virus every day? 28.800 a year? if you are allowed a full forty hours a week. You are barely able to afford an apartment, let alone pay other bills.
These corporations cause many unseen problems. We will have 3 choices…1) work for a corporation that dictates your whole life (think forcing employees to become vaccinated)…2) work for the government (your abuser) or…3) go on the dole.
This is a feature, NOT a bug. Not all of those stores are corporate-owned stores, I’m sure.
https://www.chron.com/business/article/Retail-development-in-2015-will-be-led-by-grocery-6032378.php
This is just another way of big business winning; they know perfectly well what they’re doing.
Raising the rate makes good, skilled, American workers expendable, so they can hire illegals/POC who will work cheaper and therefore establish the new class of proletariat. As this guy so put it, with so much INSOUCIANCE (!), “Perhaps some of those smaller stores can hire a few of the newly unemployed clerks from Krogers.”
Way to go, pal. Your corporate masters are giving you a socially-distant elbow bump (after necessary vaccination/Purell bath).
Most of those smaller stores are also likely non-union as well, so not only will these folks (if they get hired at all), not be making the extra $4 or $5, they won’t be making the $18+ either. If the only way you can get a raise at your job is if you have to get the government to FORCE your employer to pay you more…..then you should have been fired a long time ago.
Let them eat Amazon.