An outbreak of greed

Photo by Scott Olson/Getty Images

The United States is in the midst of the worst spike of COVID infections since the beginning of the pandemic. There are more than 100,000 confirmed cases each day and thousands of deaths. Things are particularly bad in Texas, where more than 11,000 people are currently hospitalized with COVID.  

Grocery workers, who come into contact with a steady stream of people throughout their shift, face acute risk. Among Houston-area Kroger workers, "there have been at least 347 new COVID-19 infections" and two deaths since December 28, according to information released by UFCW Local 445, the union which represents the workers. 

The union also alleges that Kroger, the nation's largest supermarket chain, is failing to enforce mask requirements and capacity limits.

Previously, Kroger compensated the employees for working in extremely hazardous conditions. On March 31, Kroger announced it would raise pay by $2 per hour for "all hourly frontline grocery, supply chain, manufacturing, pharmacy and call center associates." The company called this increase a "hero bonus."

"We will continue to support you, and your families, during this difficult time. We care about your physical, your financial, and importantly, your emotional well-being — as we continue to improve our safety measures, and benefits, to support you," Kroger Senior Vice President Tim Massa said in a video about the pay increase posted in March. 

Kroger also spent hundreds of thousands of dollars on national TV ads "thanking" its employees.

But, on May 17, with the pandemic still raging, Kroger canceled its hazard pay. The company defended the move in a statement to Popular Information. "The temporary Hero Bonus is scheduled to end in mid-May. In the coming months, we know that our associates’ needs will continue to evolve and change as we all work together to gradually and safely reopen the economy," Keith Dailey, Kroger’s group vice president of corporate affairs, said.

It's been 260 days since May 17 and things have evolved. The pandemic is much worse. But Kroger still has not reinstated its hazard pay. In a video released by the UFCW, a Houston-area Kroger worker says that one of his colleagues in the meat department contracted COVID and infected her father, who is now "on his death bed." 

Kroger says the union is exaggerating the scope of the outbreak. Kroger released a statement to the Houston Chronicle alleging that "one of the two deaths has not been confirmed as due to COVID and the other death was not established as a result of workplace exposure." The statement claimed that "our stores are as safe — if not safer than — what associates, and customers are experiencing outside of our stores in the general public.” 

As Kroger workers cope with the human impact of the pandemic, the corporation has enjoyed record profits. But that windfall is being passed on to wealthy executives and investors — not the workers who are risking their lives to keep Kroger's stores open for business.

Kroger's cash

The pandemic has forced many people to eat at home more often, and Kroger is reaping the reward. Through the 3Q of 2020, which ended November 7, Kroger had over $2.9 billion in operating profits. That's an extra $1.2 billion in profits as compared to the same period in 2019. And, of course, Kroger earned that $2.9 billion after paying its "hero bonus" to employees in April and May. 

So if the extra money isn't going to workers, what is Kroger doing with the cash?

On Friday, Kroger announced that it would be issuing "a quarterly dividend of 18¢ per share to be paid on March 1, 2021." With about 818 million shares outstanding, the dividend will transfer $147 million to investors.

On September 11, Kroger announced a new $1 billion stock buyback program. Buying company stock reduces the supply in the market, driving up stock prices. This benefits investors in the short run and also increases compensation for executives who are paid in stock grants or options. Kroger CEO Rodney McMullen received $21,129,648 in total compensation in 2019.

In 2019, the median Kroger employee earned $26,790. Kroger was required to disclose that "the ratio of our CEO’s annual total compensation to that of our median employee for fiscal 2019 was 789 to 1." 

Kroger shutters two stores to avoid wage increase

On January 19, Long Beach City passed an ordinance requiring "grocers with at least 300 employees nationwide to provide their employees with an extra $4 per hour in hazard pay for at least the next 120 days." Kroger responded by permanently closing the two stores it operated in the city. Kroger confirmed it closed the stores as "a result of the City of Long Beach’s decision to pass an ordinance mandating extra pay for grocery workers." 

Not sharing the wealth

Kroger isn't the only company being less than generous with workers who are risking their lives during the pandemic. A December report by Brookings found that Amazon and Walmart "earned an extra $10.7 billion over last year’s profits during (and largely because of) the pandemic—a stunning 56% increase." But each company has spent just over $1 billion in hazard pay and other benefits for workers. That means the "two companies could have quadrupled the extra COVID-19 compensation they gave to their workers through their last quarter and still earned more profit than last year." 

Amazon CEO Jeff Bezos has increased his fortune by $75.6 billion as a result of Amazon's skyrocketing stock price. That figure is "42 times the cost of all pandemic hazard pay that Amazon will have given its roughly 1 million workers through the end of this year."

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Saying the quiet part out loud

Dozens of corporations have suspended donations to the 147 Republican members of Congress who voted to overturn the presidential election. An even larger group of companies have suspended all of their political giving. 

Now, in a new report in the Wall Street Journal, members of Congress are reacting. And what they are saying is quite revealing. 

Progressive Democrats are readying an array of proposals to regulate or tax businesses this Congress, such as a new tax on financial transactions. Aides to Republican and Democratic lawmakers say they may be less willing to help undermine those proposals by speaking out against them in public, offering amendments to water them down in committee or lending their support to competing proposals.

What these anonymous aides are describing is unethical. Corporations should not be able to buy the ability to water down or kill progressive legislation with $5,000 checks to members of Congress. But that is apparently what is happening.

Republican aides "say they are considering punishing the companies that halted PAC donations by banning their lobbyists from coming to their offices to advocate on legislation." One Republican aide who works for a member of Congress who voted to overturn the election said, "The way these PACs have tried to so quickly distance themselves is going to have a lasting impact on our relationship with corporate America." 

The relationship described by these aides is "buying access." If that changes as a result of what occurred on January 6, it is not a tragedy. 

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