2 ms·

It was Long Beach, not San Diego, and the situation is, as you say, not that simple. Kroger has talked about closing those two "underperforming" stores many tim

It was Long Beach, not San Diego, and the situation is, as you say, not that simple. Kroger has talked about closing those two "underperforming" stores many times before. Kroger is a huge company that had record sales (over $100B) and record profits last year, so it seems unlikely they couldn't afford to absorb a temporary (the ordinance limited the extra pay to 120 days) rise in labor cost of 20-28% at two stores. More likely, Kroger is taking the opportunity to close two long-struggling stores while -- most importantly -- setting an example, i.e., sending a message to other jurisdictions which might entertain the idea of mandating higher wages that Kroger is perfectly willing to punish workers and customers if it comes to that. (Also, the stores didn't close immediately, they're scheduled to close April 17.)

robomartin 6y ago
Yeah, nothing is simple. My guess is that the stores were borderline in terms of viability and the $4/hr hike put them over the edge. Still, it sucks that people lost their jobs this way. We need a system where politicians suffer real consequences for their actions. Not sure what this would look like, but it sounds good. What we don't know is if the $4/hr hike caused employers to have to reduce worker hours, shift people to part-time basis, etc. Maybe that information will come out at some point. Imagine a situation where you have 50 people making $12 per hour and you face an instant increase in labor costs to $16 per hour, or 33%. That means the store has to INSTANTLY generate at least 33% more in profits (not sales, profits) in order to cover that increase. I don't know any business that can simply will a 33% increase in performance. This is where political thinking quickly becomes delusional. And, no, they are not sitting on fat margins that would allow absorbing such a thing.

robomartin 6y ago

Yeah, nothing is simple. My guess is that the stores were borderline in terms of viability and the $4/hr hike put them over the edge. Still, it sucks that people lost their jobs this way. We need a system where politicians suffer real consequences for their actions. Not sure what this would look like, but it sounds good. What we don't know is if the $4/hr hike caused employers to have to reduce worker hours, shift people to part-time basis, etc. Maybe that information will come out at some point. Imagine a situation where you have 50 people making $12 per hour and you face an instant increase in labor costs to $16 per hour, or 33%. That means the store has to INSTANTLY generate at least 33% more in profits (not sales, profits) in order to cover that increase. I don't know any business that can simply will a 33% increase in performance. This is where political thinking quickly becomes delusional. And, no, they are not sitting on fat margins that would allow absorbing such a thing.