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Corporations Aren’t Sharing the Sacrifices With Workers During the Pandemic

America's biggest corporations have made record profits during the COVID-19 pandemic — while denying or clawing back their workers’ hazard pay.

Amazon ended its $2-per-hour pay increase at the end of May and hasn’t offered its workers any additional compensation since a one-time bonus at the end of June. (Byan Angelo / Unsplash)

Imagine what would happen if every retail worker in the United States took the day off. Even during a non-pandemic year, the economic consequences would be massive and swift: millions of consumers unable to purchase basic goods and the sudden drop in sales quickly sending shockwaves through the marketplace — to say nothing of the chaos that would ensue at thousands of individual stores across America as hapless corporate managers desperately tried to keep their doors open and their lights on without any employees present to perform their usual tasks.

The current context only underscores the point further: without the approximately 4.6 million retail workers stocking shelves, bagging groceries, cleaning stores, and fulfilling warehouse orders during the pandemic, the economy as we know it would collapse and catastrophe would loom.

In a parallel reality where a person’s earnings were even remotely commensurate to their social contribution, the average employee at Target or Amazon would currently be enjoying their eighth month straight of boosted pay and enhanced benefits. That isn’t the case, of course.

In 2019, according to the US Bureau of Labor Statistics, the median compensation for a retail sales worker was just $12.23 an hour. Even by the pitifully low standards of most industries, people stocking shelves and staffing counters are particularly unlikely to be union members — meaning most retail workers are disempowered as well as badly paid.

During the pandemic, many have also been at added risk of infection thanks to the very nature of their jobs. Amazon alone has twenty thousand cases of COVID-19 among its workforce, and as of September, the United Food and Commercial Workers (the largest union representing grocery store workers) reported that some 238 of its members had died from the virus. One especially alarming October study of a single store in Massachusetts found the rate of infection among employees to be a full 20 percent.

If times are particularly tough for millions of workers at large retail chains, they’ve rarely looked better for owners and shareholders. As a new report from the public interest nonprofit Public Citizen reveals, America’s fifteen largest household retail corporations have collectively made some $60.8 billion in profits so far in fiscal year 2020 — outpacing last year’s profits by almost $15 billion during the same window. Nine of them have cut off hazard pay for their workers, even as the risk of infection rises again.

During the earliest months of the pandemic, often amid worker agitation and public pressure, many large companies (including all fifteen included in the report) announced some form of additional compensation for their employees. Plenty even issued effusive press releases in praise of essential workers and expressed their gratitude for those on the front lines of the crisis.

As Public Citizen’s Rick Claypool details, this astroturfed social compassion didn’t last long at many companies — with some clawing back hazard pay and other forms of additional compensation in a matter of months.

Amazon, which tripled its profits to $6.3 billion in the third quarter of 2020 (up from $2.1 billion last year), ended its paltry $2-per-hour pay increase at the end of May and hasn’t offered its workers any additional compensation since a one-time “Thank You bonus” at the end of June. Walmart, which has increased its profits by 45 percent since 2019, hasn’t awarded extra pay since July. Only three of the fifteen largest retailers have opted to maintain the hazard and appreciation pay schemes they put in place last spring.

Claypool’s analysis also finds that many companies are buying back their own stock at a startling rate, a move which reduces the overall number of shares available and thus raises the value of their stock (not to mention the value of any stock-based compensation offered to executives).

Retail workers might be indispensable during a pandemic, but in an economy hardwired to guarantee vast profits to a small few, their contribution is finding little reward even as company balance sheets report record returns. When the virus first hit, “we’re all in this together” was the reigning sentiment expressed in press releases from America’s largest companies. In their corporate boardrooms, it was clearly business as usual.