The City Council of Long Beach, California, generously has ordered larger grocery stores to pay an additional $4 an hour in “hero pay” to the “essential workers” who have toiled to keep things going through the pandemic closures.
Essential workers are benefiting, right?
Sadly, that is not the case. Many of those same workers will soon find themselves without a job. This is what happens when elected officials, who appear to know nothing about market forces, believe themselves endowed with a magic wand.
In response to the City Council’s order, Kroger is closing two stores in the Long Beach area. The Mayor of Long Beach is furious:
The city of Long Beach says Kroger has the money to fund their “hero pay,” but they’re putting profits over fairness and respect for their essential workers.
“You have a corporation that according to the Brookings Institute is making double the profits. They’re making double what they normally make off the pandemic and they’re making it on the backs of these workers so these workers deserve heroes pay,” said Long Beach Mayor Robert Garcia.
I have some news for the Mayor of Long Beach. The Brookings Institute doesn’t set salaries and wages for businesses. Businesses determine what they can pay workers; in doing so, they read the bottom line, not the latest study from an institute in Washington, D.C.
We want workers who have taken risks to keep groceries going during the pandemic to be rewarded. But government fiat in setting wages always backfires, sometimes tragically (as it will if the Biden administration succeeds in mandating a $15 an hour minimum wage throughout the nation).
Ron Fong, an official with the California Grocers Association said that many companies already have given extra pay and bonuses and have gone to great lengths to ensure safety. But it wasn’t adequate for the members of the City Council, who believe they can set wages by diktats.
A Kroger spokesman told Fox that the City Council had bypassed “the traditional bargaining process” for setting wages.
Here is what will likely happen to one Kroger worker as a result of the City Council’s actions:
Ivan Love, 23, a manager overseeing the curbside pickup operation at Ralphs on North Los Coyotes Diagonal, said he heard the news from a flood of text messages co-workers sent him Monday, his day off. With less than three months before the store’s closure, he said, no one is sure where they’ll end up.
Grocery stores are already crowded with employees, he said, and the pandemic makes getting a job harder. Even if his union transfers him to another store, he worries he might not maintain his managerial title or get enough hours.
This is what happens when government officials blunder into something about which they often know nothing. The City Council members may be well-intended; they may be virtue-signaling. But they clearly don’t know what the ramifications of their actions will be.
And they won’t be the ones to suffer.
We’re at risk of seeing something like this on a nationwide scale if the Biden administration enacts an unrealistic national minimum wage hike.