Extra pay mandates could increase grocery costs for a family of four by $400 per year

Get the Facts

Since the start of the COVID-19 pandemic, grocery store employees have served on the frontlines as essential workers to ensure customers have safe access to food and daily living essentials. In recognition of these uncertain times, grocery stores have invested significantly in equipment and protocols to protect workers and shoppers, as well as provide extra pay and benefits for grocery workers. Now, 11 months into the pandemic, some California city and county politicians are proposing mandates that either duplicate or significantly expand upon already augmented extra pay and benefits. These proposals would drive up grocery costs for families by $400 per year on average, and harm community grocery stores and their employees at the worst possible time. A rushed vote on these proposals is premature. Local communities must take the time to carefully study the potential negative impacts that come with such decisions.

Fact: Grocery stores have made significant investments to make stores safer for workers and customers.

  • Grocery store workers are indeed frontline heroes, making sure Californians have access to safe, reliable food and supplies throughout the pandemic
  • Grocers have taken significant steps to protect workers from the pandemic, including:
  • Requiring masks in stores
    • Offering additional PPE
    • Instituting daily employee temperature checks
    • Installing partitions at registers
    • Increasing cleaning protocols
    • Reducing store capacity
    • Rapidly scaling up online capacity and curbside pickup
    • Enforcing social distancing requirements
  • Extra pay mandates are a false choice, and will not make grocery workers any safer.

Fact: Grocery stores have provided extra pay and benefit enhancements to support grocery workers.

  • Since March, California grocers have added tens of thousands of bridge jobs at a time when millions of Californians needed reliable good-paying work.
  • To support workers during these difficult times, grocers have provided extra pay and benefits as a supplement to the fair, competitive wages and benefits collectively bargained by grocery workers’ unions, such as:
    • Increased hourly pay by an average of $2-3 per hour
    • Spot bonuses
    • Complimentary groceries, gas, and other necessities
    • Increased paid time off, including an extra two weeks paid-sick leave for many workers who are ill, need to care for ill family members, or need to quarantine
    • Benefit plans that cover COVID-19 testing, treatment, and care

Fact: Extra pay mandates could increase grocery costs for a family of four by $400 per year at the worst possible time. 

  • According to a new economic analysis, the extra pay proposals of $5.00/hr would increase grocery costs for the typical family of four by $400 per year.
    • If implemented statewide, additional grocery costs would be $4.5 billion in California.
    • If implemented in the City of Los Angeles, its residents would pay $450 million more for groceries.
  • Higher grocery costs would hurt Californians at a time they are already struggling to put food on the table – and would be especially harmful to low-income, people of color, seniors, and disadvantaged communities.
  • Today in California:
    • 8.2% of Californians are currently unemployed.
    • According to a November 2020 Covered California study, 62% of Californians report having their work hours or income reduced, including 71% of Latinos and 72% of lower-income families. Nearly half (47%) of Californians have had trouble paying some kind of bill as a result of COVID-19.
    • According to a December 2020 Public Policy Institute of California (PPIC) report, at least one in five Californians report cutting back on food including 18% of seniors. Sixteen percent (16%) of seniors 55+, 32% of Latinos, and 28% of African Americans indicated needing to receive food from a food bank.

Fact: Extra pay mandates would likely lead to increased food insecurity issues that are more abundant for low-income and disadvantaged communities.

  • City and county politicians should be thinking about ways to support grocers to remain open in minority neighborhoods – not create mandates that restrict them.
  • Driving up costs and pushing grocers to close some stores would disproportionately cause low-income consumers to travel greater distances to purchase groceries while incurring additional costs. These additional costs will cut into grocery budgets that have already been stretched thin during COVID-19.
  • Research from Wichita State University has shown that increased costs/taxes drive shoppers across county or city lines. As a result, increased food prices in Los Angeles and/or Long Beach will cause consumers to travel to neighboring cities to purchase groceries.

Fact: Extra pay mandates could limit access to grocery stores for consumers and eliminate jobs and hours for grocery workers.

  • In addition to higher food costs, these proposals could cause significant harm to grocers, especially small and ethnic markets and their employees by making it difficult for them to stay afloat. Grocers operate with razor thin margins, even during the pandemic.
  • According to new economic analysis, extra pay proposals could also force grocers to reduce the number of workers or reduce worker hours by 22% to avoid store closures. This hurts the very grocery workers the proposals are intended to help.

Fact: Localities need to carefully study the potential harmful impacts on consumers, workers and our communities before rushing to make a decision.

  • Communities should acknowledge the significant steps that grocers have taken to protect workers and boost their pay and benefits before implementing rigid, duplicative pay mandates.
  • These proposals also ignore the total compensation package provided to many grocery workers, which includes strong health care coverage and reliable pension plans.
  • Some localities are rushing to implement these proposals in just a few short weeks without a complete analysis of their costs, impact to families and communities, and input from businesses.
  • Communities must take the time to do research and understand potential impacts before rushing to a decision that could do far more harm than good.