Supermarket workers in Seattle should soon be in line for a raise. The Seattle City Council just approved legislation requiring large grocery stores to immediately start offering its workers hazard pay. The rule applies to chains with more than 500 employees and to stores larger than 10,000 square feet. It does not, however, apply to convenience stores or farmers markets.
Seattle businesses subject to this new requirement will need to boost workers' pay by $4 an hour for as long as the city's coronavirus state of emergency remains in effect.
This isn't the first move Seattle has made to reward workers who risk their health every day to make sure consumers stay fed. Last summer, the City Council required companies like Instacart to pay their delivery drivers an extra $2.50 per order due to the pandemic.
Will more cities follow suit?
Seattle isn't the only city to require hazard pay for essential workers. Los Angeles, Berkeley, and Long Beach, California, have passed similar measures.
Given that we're now almost a year into the pandemic, it's surprising grocery workers haven't been entitled to hazard pay all this time. But with coronavirus variants being introduced into the mix and vaccine rollouts happening slower than many would like, the gesture on Seattle's part is by no means meaningless.
In much of the country, essential workers get first priority when it comes to getting a vaccine, but many have yet to manage to schedule appointments. Even so, there's a waiting period between doses (both currently approved vaccines require two doses, timed three to four weeks apart), and health experts agree that optimal immunity isn't achieved for another week or so following a second dose. As such, many grocery store workers will inevitably continue to put themselves on the line in the coming weeks, so boosting their pay makes a lot of sense.
But some grocery stores aren't thrilled with the idea of hazard pay. Kroger (NYSE: KR), for example, closed two of its California locations once hazard pay became a requirement. And if more stores follow its lead, it could spell bad news for real estate investors. Shopping centers frequently rely on supermarkets to serve as anchor tenants, and losing them could constitute a devastating financial blow, especially at a time when so many larger retailers are also biting the dust.
On the other hand, some supermarkets are embracing the idea of hazard pay. Trader Joe's, for example, announced that it would be increasing its hazard pay (what it dubs "thank you" pay) from $2 an hour to $4 an hour effective Feb 1. Trader Joe's is also one of several employers that will be paying workers to get a coronavirus vaccine. Aldi and Dollar General Corp. (NYSE: DG) have announced similar policies.
The Millionacres bottom line
It's too soon to say whether more cities will begin to mandate hazard pay for supermarket workers, but if they do, there could be backlash for real estate investors -- even though logic and ethics dictate that workers who put their lives on the line every day for minimal pay should, at the very least, receive a modest boost.