business news in context, analysis with attitude

On Friday we reported on how the Los Angeles City Council is the latest body to vote in favor of hazard pay - a mandated hourly bonus for grocery store employees dealing with pandemic issues.

I commented:

I repeat, it is bad public policy to focus on just one category of workers.  I'd be a lot more impressed if these lawmakers would send medical vans to every grocery store in their communities to make sure that workers can get vaccinated.  

Prompting MNB reader Bill O'Neill to write:

They not trying to impress you!  They are trying to reward those that have worked through the many challenges. 

I get that.  I'm not sure it is good public  policy for government officials to reward one set of employees with companies' money.

I suggested last week that instead of raises, what cities ought to do is send vaccination vans to supermarkets so that employees can get shots, prompting MNB reader Brian Parker to write:

I like the idea of a rolling shot-mobile!  That would be a great call.  Don’t come to us, we’ll come to you.  We’ve got you covered.

Costco announced last week that it is instituting a $16 minimum wage nationwide for its employees.  I wrote:

The difference between Costco and a lot of retail entities is that Costco seems to understand that its growth is dependent on satisfied customers who continue to pay their membership fees and shop at its stores - and that is dependent on a strong employee base that makes customers happy.  That's a priority and a core value.

At a lot of retailers, the priority and core value is keeping labor costs as low as possible - even if, in some cases, part of the value equation is customer service.

You'd think more businesses would understand the wisdom of Jelinek's words.  If they did, there might not even be a debate over a national minimum wage.

One MNB reader wrote:

While I appreciate your comments on this story, I have to disagree a bit. I work for a fairly large supermarket chain and watch these stories with great interest. The problem I see and I have dealt with is the compression this causes for the longer term folks who have dedicated their lives to our company. When a change like this is made, it’s great for the incoming hires and newer employees, but creates a situation where they are making the same or more than a five or ten year employee.

My company has been dealing with compression over the last few years as our state continues to raise its minimum wage. There are no easy answers as it costs millions of dollars to “get everybody right” and it still isn’t perfect. I am in a position where I have to communicate these changes and the answers to their questions aren’t simple. You can’t fix the economy by just increasing minimum wage while alienating those who don’t get an increase because they are making $16.50 after ten years of employment.

I don’t have the answers, but let’s not forget how critical these folks are to our business and the financial  pressure this puts on an entire organization when faced with this scenario. I want to know how Costco is handling the compression this will create, if at all, and how they will manage customer service when seasoned employees aren’t so giddy that the person just hired makes more than they do. 

Regarding the popularity of ghost kitchens, one MNB reader wrote:

The ghost kitchen concept has a definite place in today’s environment, and it is helping to keep businesses afloat.  My question is longevity.  Will this concept last past the covid years or will businesses / restaurants go back to self-production and just maintain the delivery channels created for their own benefit?  Although it would not be a win for the “ghost” concept,  it would definitely could become a newly acquired capability for existing business’s. 

And, responding to our Covid-19 coverage, one MNB reader wrote:

I recall Winston Churchill’s speech after the English victory at El Alamein in 1942:

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

Let's hope. Though, I have to admit, the recent news seems a lot more hopeful than just a few months ago.

I'm looking forward to the day when I don't have to write an "MNB Covid-19 Coronavirus Update."