‘Hungry at the Table’ teases wages and conditions at the grocery giant, whose profits have skyrocketed during the pandemic.
Written by Bobby Murray, Capital and Men
This story was produced by the award-winning nonprofit journalistic foundation Capital and Maine and is posted here with permission.
An analysis released this week shows that many employees of the nation’s largest grocery chain, Kroger, and the workers who manage and sell food, are scrambling themselves to get enough food, struggling with bills due to part-time, unpredictable schedules and competition, as front-line workers do, With the threat of COVID.
That’s one revelation from a survey of 10,287 workers who described working conditions at Kroger stores in 20 counties across Washington state, Wyoming, Colorado and most of California. The company owns, among many other chains, Food 4 Less in the Sacramento area. The research was conducted by The Economic Roundtable, a Los Angeles-based nonprofit organization. The survey was an important basis for a report documenting companies’ hiring and investment practices. titled hungry on the table Released January 11, the report also examines Kroger’s business practices, business and impact on society. The work was commissioned by the United Food and Trade Workers Union. (Disclosure: UFCW is the financial backer of Capital & Main.)
The title comes from a poem by Joyce Harjo that states, “The world begins at the kitchen table. Whatever happens, we must eat to live.”
This poem was selected by Dan Fleming, chair of the Economic Roundtable and co-author of the report with Peter Dreyer, Patrick Burns, and Aaron Danielson. The idea has resonated with research showing that more than three-quarters of Kroger workers do not have reliable access to an adequate amount of nutritious, affordable food, according to USDA standards.
“This is a store with a massive supply of food,” Flaming says. “And they have workers surrounded by food all day and they don’t have decent access to food.” Flaming says workers are fired if they eat a single grape, or if they take food from the garbage. “It’s scandalous working in a grocery store for workers who can’t eat properly.”
Flaming says workers at the Kroger chain are being forced to make unsupported choices. “They are choosing between paying the rent, buying food, and operating the car so that they can get to the job.”
The stores in the Kroger empire include household names such as Ralphs, Food 4 Less, and King Soopers.
Capital & Main inquired of Kroger about payment and scheduling practices. In a statement, a company spokesperson defended its pay scales.
“At the Kroger family of companies, we care deeply about our partners and we demonstrate this through actions such as the continuous investment of hundreds of millions annually to increase wages and bonuses, offering affordable healthcare benefits as well as our commitment to providing a culture of opportunity where our partners can thrive and advance.
“Since 2017, we have invested significantly to increase our national average hourly wage from $13.66 to $16.68, reflecting a $3 hourly increase or 22% increase.
“As a grocer in America, we have balanced significant investments in wages for our partners while maintaining food prices for the communities we serve.”
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Jane Olsen worked for the Ralph family in La Cañada, north of Los Angeles, for four years. She works at a deli, where she tastes cheeses – the brand she promotes supports the practice, so she is equipped to answer customers’ questions and make recommendations. “Sampling cheese and eating cheese are two different things. You taste the cheese so you can tell the customer [what it’s like]It’s very hard to do when you’re starving – my son and I have been on ramen for a year,” she says.
Olsen says she earns $14.25 an hour; Her monthly rent is $1,550. She walks more than three miles to and from work because she can’t buy a car, and she collects recyclables that bring in $150 or so a month.
The Economic Roundtable study revealed many of these stories. Her research found that the lowest rate of wages at Kroger stores ranged from $11.10 to $14.30 an hour.
The report notes that across the grocery industry, 29% of the workforce lives below or near the poverty line.
If this is the industry standard, why choose Kroger?
As the largest grocery chain in the country, Kroger had a role in setting that standard, Flaming explains. “Most of their expansion came from buying smaller grocery chains that in many cases had decent employee practices and high levels of customer service.” Meanwhile, Walmart, which also sells groceries, has created a model of wage and employment practices in the grocery industry for Kroger and others to follow.
Flaming says there are risks in trying to replicate the Walmart model — such as when policy and business structure shortcuts increase employee vulnerability.
Ask Sophia, an L.A.-area employee Ralphs (she asked that only her first name be used). Her schedule: Arrive at 5 a.m., sweep the store, and clean the bathrooms. “Then you put mats on all the logs, you collect all the perishables, you put the perishables away, and you have to wash the windows on the glass doors. You have like an hour to do that.” Sometimes you have to assemble shopping carts in the parking lot. And if the customer shows up at 8 in the morning, he must hand everything to the employees at the check stand.
She says Ralphs should pay for another employee. “Two people should be in shifts at five in the morning for what they want to do. No—it’s on that person.”
Her income is variable. Sophia earns $15.30 an hour. She was working 40 hours a week because of her co-workers out of COVID, but the following week, her hours were cut in half.
Unpredictability is tough financially, but even on a full-time schedule, her rate isn’t a living wage.
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Kroger “is the nation’s 17th-largest company by revenue and fourth-largest by number of employees, about 465,000,” says Peter Dreyer, co-author of the Economic Roundtable Analysis and professor of policy at Occidental College in Los Angeles.
CEO Rodney McMullen got a 6% salary increase in 2020 to $22.4 million — his income-to-employee ratio is 909 to 1, the study notes. This level of executive pay is enabled by share buybacks, where the company buys back its own shares, and then with fewer shares, each share gains value. Dreyer explains that board members and senior executives receive a portion of their compensation in equity.
in a hungry on the table, Dreyer provides a glimpse into Kroger’s board of directors (including former Transportation Secretary Elaine Chao, wife of Senator Mitch McConnell). The summary reveals a dizzying streak of income and intertwined corporate interests, and even reveals the square footage of some of the lavish residences of some of the managers.
In 2020, with the pandemic spreading, many employers offered “risk pay” or bonuses to frontline workers interacting with the public, and local jurisdictions followed suit to enact ordinances setting what is generally known as the “hero pay” standard. Before the decrees were passed, Krueger boosted hourly rates in March 2022 but called off the increases in mid-May. Then, after the enactment of “hero pay” laws, the company began closing stories instead of paying the new rate — an hourly payment of $2.00, $4.00 in some cities, depending on local wage rules.
Three packed Los Angeles stores have closed – Krueger claimed they were “underperforming,” but she also cited Los Angeles law as the reason.
While Kroger spent about $342.7 million on risk pay in 2020, the company purchased $1.32 billion of stock in the same year.
“Kroger has made a lot of money during the pandemic,” Dreyer says.
Meanwhile, “they have politically fought back attempts by cities like Los Angeles and Pasadena to try to adopt champion pay through government decrees. They are lobbying, spending money on campaign contributions.”
Flaming says the company’s practices should give investors pause. “This is a company that behaves in a way that devalues its assets, and puts its brand on the ground.”
Flaming says there are risks in trying to replicate Walmart’s model. Kroger expanded by buying into local grocery stores that thrived on customer service. The company has enjoyed a lot of growth buying local grocery chains, but as neighborhood markets change to a low-staff, low-service model, they’re losing things that keep customers coming back, Flaming explains.
Corporate responsibility and standards are one metric that investors look at.
“To survive the test of public respect, they have to do better. They need to raise wage levels and give workers more hours, and they need to be more equitable employers,” he says.
Some change may come through local city legislation and through union action, Flaming adds.
In southern Colorado, employees of Kroger’s King Soopers chain voted to strike against alleged unfair labor practices after negotiations failed.
“Employees have told us they spat on them, and they took an oath. Companies have made billions of dollars in profits in the past 21 months with the pandemic, and that needs to be shared with workers,” Kevin Schneider, a representative for UFCW Local 7, said before the vote on the strike.
The strike is scheduled to begin on January 12.
In Portland, Oregon, a strike of 7,000 Kruger workers went on just the day before Christmas. They earned $15 an hour in starting wages and raises for other categories of workers, as well as a system of regular wage bumps.
Whether it’s through local or state legislation or through union lobbying, Flaming says, “We need grocery stores to open, and we need grocery stores to operate fairly.”
Copyright 2022 Capital & Main