It’s good to be king.
What could be more gratifying and delightful than roaming across the landscape, pointing at people who are working for somebody else and declaring, “I decree that you deserve a raise! And you shall have it!”
Anyone could be elected Homecoming King with that kind of power.
Sadly or happily, Americans don’t live under the rule of a king, not even a homecoming king. So it’s starting to attract attention that politicians are acting as if they have the power to wave a scepter and make some private companies pay higher wages to some of their workers.
Kroger just announced that it would close three underperforming stores in L.A. following the city’s order to pay all hourly, non-managerial employees an additional $5 an hour in wages for four months.
“Reprehensible,” declared the king of Los Angeles, Mayor Eric Garcetti, upon hearing the news.
Shrinking the kingdom by three stores is not what the City Council intended when Council President Nury Martinez and Councilman Mitch O’Farrell introduced the motion for the wage hike. The edict imposed the “hero pay” requirement on grocery and pharmacy retailers with 10 or more employees on site and at least 300 employees nationally.
Kroger issued a terse statement explaining that the company’s stores operate on razor-thin profit margins and the pay mandate, a 28% average increase in labor costs, had made it “financially unsustainable” to keep the three stores open.
Kroger earlier announced that two stores in the city of Long Beach will close on April 17 after that city adopted a similar ordinance requiring “hero pay” raises of $4 per hour.
Long Beach recently won a Pyrrhic victory in federal court, persuading a judge to reject a request from the California Grocers Association for a preliminary injunction to block the pay-raise ordinance. The case continues; another hearing is set for March 22.
“We remain confident that these extra pay ordinances will not withstand legal scrutiny,” said Ron Fong, president and CEO of the California Grocers Association. The CGA is appealing the denial of the preliminary injunction to the Ninth Circuit Court of Appeals.
Andrea Zinder, president of United Food and Commercial Workers Local 324, said grocery workers “would have never thought that their jobs would be considered life-threatening” until a year ago. “Their sacrifice deserves compensation,” she said, adding that she hoped “other cities” would also recognize the work that essential grocery workers are doing.
As a matter of fact, politicians in other cities are similarly decreeing pay raises for the members of this politically powerful union. Pay raises for grocery workers have been mandated by the San Jose City Council as well as the local governments running Oakland, Montebello, West Hollywood, and Daly City. The Grocers Association is suing all of them.
The CGA argues that the “hero pay” ordinances are unconstitutional and violate the National Labor Relations Act.
Even if federal courts ultimately uphold the measures, local laws that increase a retailer’s cost of operation result in higher prices, and that hurts the consumers who need the essential goods these stores provide. Families who are in the worst financial straits will be the most injured by the increase in prices and the loss of neighborhood stores.
Fear not. Surely the local kings will share their bountiful campaign contributions with the little people.
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