Trader Joe’s has responded to the Seattle City Council’s recently passed mandate for large grocery stores within the city to raise pay by $4 for their front-line employees.
The grocer known for its quirky culture and unique offerings is raising pay for all its employees nationwide, albeit only temporarily.
“Effective February 1, 2021, the ‘thank you’ premium for all hourly, nonmanagement Crew Members, was increased by two dollars, for a total of $4 an hour,” Trader Joe’s wrote in an update on its website.
The post doesn’t mention Seattle, or the city’s new mandate requiring $4-an-hour hazard pay for the duration of the coronavirus pandemic, but a message to employees made clear that that’s the reason for the pay hike.
The raise at, least partially, undercuts arguments from business leaders and the grocery industry that Seattle’s legislation was untenable in a business with slim profit margins.
Seattle, along with several cities in California including Long Beach and Berkeley, passed legislation mandating the temporary raises last month. Seattle’s law, which applies to large grocery stores with more than 500 employees worldwide, passed last week, less than a week after it was first introduced.
“After seeing this occur with a few cities in California and Washington we have determined that such actions are unfair for all stores throughout the Company,” Trader Joe’s management wrote last week in a letter posted to a staff bulletin board at a Seattle store. “Accordingly, effective February 1, we will increase our ‘thank you pay’ for all Crew Members by two dollars, making the ‘thank you pay’ equal to $4 company wide.”
There is a bit of a hitch, however.
The company, in the letter, also said it would cancel its midyear raises this year, which were scheduled for summer 2021.
That raise, which employees generally get twice a year, is normally 65 to 75 cents an hour, employees said. But it’s permanent. So employees nationwide will be getting a temporary $4-an-hour pay bump but forgoing a much smaller permanent pay bump.
The letter, from company CEO Dan Bane, President Jon Basalone and a third executive, said the $4 raise will continue throughout the pandemic or until employees are “eligible for vaccines as ‘grocery workers.'” The company will not go above the $4-an-hour raise, no matter what other cities may do with hazard pay legislation, the letter says.
A Trader Joe’s spokesperson did not respond to repeated requests for comment.
A local Trader Joe’s worker, who requested anonymity to avoid potential retaliation, said the permanent pay raises, including the rescinded one, are the reason employees stay at the company long term.
“People expect their pay is going to go up $1.50 every year,” he said. “They’re just going to use this one permanent raise to pay for this temporary raise.”
Other grocers have reacted far differently to mandatory pay-raise legislation.
Kroger, the parent company of Fred Meyer and QFC, announced that it would close two grocery stores in Long Beach, California, in response to a 120-day $4-an-hour pay raise mandated by the City Council there.
“The irreparable harm that will come to employees and local citizens as a direct result of the City of Long Beach’s attempt to pick winners and losers is deeply unfortunate,” Kroger said in announcing the store closures.
Asked about the company’s Seattle stores, QFC spokesperson Tiffany Sanders provided a statement that said in part, “These misguided mandates could put any struggling store in jeopardy of closure.”
And the CEO of PCC Community Markets wrote a public letter to Seattle Mayor Jenny Durkan, urging her not to sign the pay-raise legislation, which passed unanimously.
“PCC rarely weighs in on issues in the Seattle City Council,” CEO Suzy Monford wrote. “We are so concerned about the impact of the Hazard Pay Ordinance on independent grocers like us, that we feel we have no choice other than to share our concerns.”
Monford wrote that PCC had net income of $1.7 million in 2019, but spent $3 million in COVID-related expenses last year, including appreciation pay and bonuses and in-store safety protocols.
“Unlike large corporate grocers who saw a large sustained uptick in sales nationwide, we have not had a sustained increase in sales and do not have a national footprint to rely on to offset these costs nor the cost of doing business in Seattle,” Monford wrote.
Durkan will sign the legislation on Wednesday, her office said, and it will go into effect immediately.
Business editor Rami Grunbaum contributed to this report.