ITEM NO. 9
Rebuttal to the City Manager’s Report
DATE: April 7, 2021
FROM: Anne Bagasao, Ella Hushagen, John Srebalus & Helen Tran, Concerned Residents of South Pasadena
SUBJECT: Public Comment, Open Session, Agenda Item 9
Establishing Requirements for ‘Hero Pay’ and Associated Protections for Grocery Workers in the City
Thank you for considering a Hero Pay (aka Hazard Pay) ordinance for the City of South Pasadena. Given the community support shown our front-line workers, we are confident you will back our collective gratitude with a simple act of material reward, just as other cities have done.
While we are glad this item made the agenda, we are obligated to mention that it was first motioned back on January 20, 2021. Had the ordinance been proposed and passed at the next council meeting, on February 3, we would have already been halfway through the 120-day period of the ordinance. Delay on your part — during which the same workers in other cities have been earning Hero Pay — cannot in good faith be used to argue that the COVID-19 picture is improving and the need for Hero Pay thus fading.
A. Hero Pay is still timely and relevant.
Hero Pay is immune to the claim, “It’s too late,” as implied by the City Manager’s memo. (p. 9-3) The aim of Hero Pay was never to replace or enhance workplace safety. Its purpose has always been to compensate workers for the risk their job has entailed. Many of us retreated to our homes and Zoom calls with the comfort of continued access to the seven (7) grocery stores in our city. Fire fighters are heroes compensated partly for their training and ability, and partly for the dangerousness of their job. Grocery workers receive no such wage premiums because, under ordinary conditions, their jobs are not life-threatening.
Let’s start with what’s uncontested in the City Manager’s memo:
• Retail occupations “do not allow for work to be performed at home and/or offer very low capability to socially distance, they are at greater risk to be infected. Millions of frontline grocery workers nationwide have had to face new job-related hazards not previously considered especially dangerous.” (p. 9-1)
• “Low-wage workers in America have suffered the worst economic pain of the pandemic and have suffered disproportionate job losses due to their limited ability to telework.” (p. 9-3)
• “The [Brookings] study…found that top, publicly traded retailers have seen a 39% increase in profit averaging $16.9 billion in extra profit in 2020.” (p. 9-3)
• A federal court denied the California Grocers Association’s request for a preliminary injunction that would have halted enforcement of the hero pay ordinance in the City of Long Beach. (p. 9-3)
The City Manager’s memo acknowledged: the danger is real, these companies can afford it, and the litigation is failing. This is enough for you to immediately pass an urgency ordinance requiring hero pay as other cities have done.
But there are further reasons.
The City of South Pasadena is in the process of addressing its dark past as a sundown town and looking at ways to mitigate and eliminate disparate negative impacts on people of color. Hero pay dovetails with these efforts. According to the CDC, “Long-standing systemic health and social inequities have put many people from racial and ethnic minorities at increased risk of getting sick and dying from COVID-19.”
And the retail front lines are not stacked evenly. According to the Brookings Institution:
During our national reckoning over structural racism and inequality, hazard pay can also help address racial equity. Black and Latino or Hispanic workers are overrepresented among low-wage frontline essential workers. In 2018, Black workers comprised 13% of all U.S. workers, but made up 19% of all low-wage frontline essential workers. Latino or Hispanic workers comprised 16% of all U.S. workers, but 22% of low-wage frontline essential workers.
If we are serious about structural equality, we will not hesitate to grab the low-hanging fruit that is this profit-sharing plan in one of the pandemic’s best-performing sectors.
B. The arguments against Hero Pay in the City Manager’s memo are conclusory, unsupported by data or reliable research.
1. The memo offers no credible evidence that large grocery retailers will suffer real financial hardships from a temporary increase of workers’ wages.
The memo claims that sources informed city staff that grocery stores will cut hours and eliminate positions in response to a hazard pay requirement. Such tactics are cruel and punitive. The need for such measures is belied by the stores’ huge profit margins. Our local government should condemn such practices, rather than acquiesce to them as “financial concerns.” Bowing to these threats against job security and earning a living wage is an ethical non-starter.
Customer demand for groceries will likely not shrink to accommodate staffing levels butchered down out of spite for both worker and shopper. Business and goodwill will be lost. Closing a store and thus creating an opening for competitors does not make rational business sense.
There is no conclusive evidence to date offered by The Kroger Co. or other grocery stores that temporary, increased wages for workers must result in “severe unintended consequences” such as store closures. (p. 9-3) It wreaks of bad faith for The Kroger Co. to close stores in several cities immediately following their enactment of Hero Pay ordinances. It also remains unknown whether the company had already planned for these closures prior to the passage of Hero Pay and/or used Hero Pay as a convenient excuse to shut down. To the extent that city staff truly “does not possess any authoritative knowledge to ascribe a direct correlation between that city’s adoption of a Hero Pay program and the stores’ decision to close some of their markets,” the city, too, should not make the unsupported leap that passing Hero Pay in South Pasadena for 120 days will cause stores to close.
In addition to the weak logical underpinnings of city staff’s “research” and “feedback” from “other cities where the ordinance is already in place,” the memo does not disclose these sources of information. Who was interviewed, and from which cities? What counterarguments were considered?
2. Other statements about ‘logistical problems’ in implementing pay increases are conjectural and should not persuade a policy decision.
At times the City Manager’s memo reads like a theoretical debate assignment in which opposing arguments are merely hypothetical rather than grounded in reality. The city manager states, “[S]uch an ordinance would likely present logistical problems in the payroll departments and/or systems of local grocers presented with the challenges associated with immediately implementing pay increases to employees.” (p. 9-4) This is conjecture and a grasp at the thinnest of straws. We asked Mr. Joyce to share with us the research behind this claim, and he offered none. In fact, the opposite appears to be true. Companies are already complying with Hero Pay ordinances elsewhere in Los Angeles County and there are systems in place to accommodate these changes.
3. The South Pasadena Chamber of Commerce provides limited authority and experience to represent the true concerns of large retail corporations.
Perhaps the City Manager’s logistical forecast originated with the Chamber of Commerce, with whom he consulted instead of a body qualified to speak to the operations of large grocery and drug corporations. (p. 9-3) In South Pasadena, the Chamber is a trade organization primarily for small businesses. Chambers historically oppose wage increases of any kind, and we’re clear on how the Grocers feel. Tear-stained billions.
4. The California Grocers Association’s first legal challenge against a Hero Pay ordinance is not likely to succeed.
The City Manager provides an incomplete litigation update involving the California Grocers Association’s challenges to Hero Pay mandates. (p. 9-3) The memo highlights the Grocers’ claim that extra pay would have “‘severe unintended consequences on not only grocers, but on their workers and their customers including higher food prices and store closures.’” Glaringly, the memo fails to explain why the federal court denied the Grocers’ request for a preliminary injunction—not a temporary restraining order—to stop enforcement of the ordinance before a court would hear the merits of the case.
The denial of the Grocers’ request for a preliminary injunction is significant because the court held that they failed to establish a likelihood of success on the merits. This ruling forecasts that the Grocers are not likely to succeed in striking down Long Beach’s Hero Pay ordinance. In other words, the Grocers have an uphill battle in defeating the ordinance.
First, the court found that the Grocers did not show the ordinance would interfere with the collective bargaining process by preventing employers from mitigating labor costs from Hero Pay increases. After all, the ordinance is a labor standard like those that set minimum wage.
Second, the Grocers were also not likely to succeed on its Equal Protection claims that grocery stores are being unconstitutionally and unfairly targeted over other industries. The Court found that Long Beach city had a sufficient rational basis for the ordinance based on the “theory that large grocery stores have reaped significant profits during the pandemic while their employees’ wages have remained more or less the same, despite the increased risk of exposure to COVID-19 that grocery workers face.” Additionally, while the Grocers argued that “California retail workers have only a mildly elevated mortality risk relative to the general population,” the court believed this argument to be unconvincing: “a mildly elevated mortality risk is still an elevated mortality risk.”
Third, in its analysis of the Grocers’ Contract Clause claims, the Court found that the Grocers did not offer sufficient argument against the ordinance’s stated purpose of “fairly compensating grocery workers for the hazards they encounter as essential workers.” Similar to the Grocers, the City Manager’s memo misrepresents the purpose of the ordinance as now moot because more people are eligible for COVID-19 vaccines (e.g., “Staff is aware of reports that some impacted employers elsewhere are resisting the 120-day timeline for requiring hazard pay, given that food workers in Los Angeles County are now eligible for vaccination.” (p. 9-3)).
Moreover, it is unclear if grocery workers, if vaccinated, are entirely protected against new variants of the coronavirus. According to the CDC on April 2, “[s]cientists are working to learn more about how easily [these variants] spread, whether they could cause more severe illness, and whether currently authorized vaccines will protect people against them.”3 And as the court mentioned, even a mildly elevated mortality risk is still an elevated mortality risk.
Despite the court’s denial of the Grocers’ preliminary injunction, the City Manager’s memo lauds their credibility as representing 6,000 grocery stores across the state. UFCW Local 770 alone represents over 25,000 grocery and drug retail workers across just four (4) California counties: Los Angeles, Ventura, Santa Barbara, and San Luis Obispo. UFCW Local 770 supports the passage of a Hero Pay ordinance in South Pasadena, as acknowledged in the memo.4 (p. 9-3)
C. Do the right thing.
The people of South Pasadena support this measure because, simply put, it is the right and human thing to do during these hard times. The thank-you signs on South Pasadena lawns feature a shopping cart, and they are part of our landscape. Our advocacy on this matter has garnered a record number of signees. The remaining piece is the courage to act.
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