Windfall profits and deadly risks

Windfall profits and deadly risks:

How the biggest retail companies are compensating essential workers during the COVID-19 pandemic
November 2020

Editor’s note: In case you missed it, watch an online event that was held on November 23 with frontline workers and experts on the pay, protections, and policies frontline essential workers still need.

As the number of new COVID-19 infections smashes daily records, the pandemic has entered its deadliest phase yet. With a dark winter looming, millions of frontline essential retail workers face grave risks to their health, often for very low wages and without the hazard pay they were earning at the start of the pandemic. Meanwhile, the biggest retail companies in the country continue to earn eye-popping profits.

In this report, we examine this inequality from two perspectives. As frontline retail workers at top companies face unprecedented risks on the job, what compensation should they earn, and what have they earned so far during the pandemic? And as those large retail companies earn unprecedented profits, how have they balanced investing in their workers and their profits?

We find that while top retail companies’ profits have soared during the pandemic, pay for their frontline workers—in most cases—has not. In total, the top retail companies in our analysis earned on average an extra $16.9 billion in profit this year compared to last—a stunning 39% increase—while stock prices are up an average of 33%. And with few exceptions, frontline retail workers have seen little of this windfall. The 13 companies we studied raised pay for their frontline workers by an average of just $1.11 per hour since the pandemic began—a 10% increase on top of wages that are often too low to meet a family’s basic needs. On average, it has been 133 days since the retail workers in our analysis last received any hazard pay.

At most of the biggest retail companies in America, the gap between the struggles and sacrifices of low-wage frontline workers and the wealth they create for their employers and shareholders is wider than ever.

Contents

When the COVID-19 pandemic began to spread across the country in March, Jeffrey Reid—a meat clerk at a Giant Food outside of Washington, D.C.—was thrust onto the frontlines.

“One minute, I’m just a hard worker,” he said in a March interview. “I get up every day, I do my eight hours, it’s like a routine. Then, overnight, grocery workers have become essential personnel.”

Sales at his store soared as customers stocked up on groceries. He described the “sheer enormity of the pandemic” and the “fear” he could see in people. Reid vowed to carry on working: “I have been in this business for the last 11 years. I am going to keep getting up in the morning and going to work.”

Initially, Reid was grateful for the modest pay bump his employer, a subsidiary of the Dutch company Ahold Delhaize, gave him. By the summer, that feeling had vanished. Just two months into the pandemic, Giant ended his extra 10% “recognition pay,” despite a spike in the company’s sales that more than doubled its second-quarter profits. Even as hazard pay for workers like Reid ended, Ahold Delhaize spent more than $862 million repurchasing its stock—more than 1.5 times what it spent on all COVID-19-related costs in the first three quarters of 2020 to protect and compensate its workers.

“To me, it’s like a slap in the face,” said Reid. “All of a sudden, we went from being essential to being sacrificial, all for the sake of the bottom line. Now you’re telling us that this thing is still out here, people are still dying, and you want to do away with hazard pay and give a one-time bonus? It’s a bunch of B.S., to be honest. It is still a pandemic, the last time I checked. There is a still a hazard out there.”

All of a sudden, we went from being essential to being sacrificial, all for the sake of the bottom line

Jeffrey Reid, meat clerk at Giant Foods

The COVID-19 pandemic provides a revealing window into the balance some of America’s largest companies strike between their workers and their profits at a time of extreme sacrifices and extreme earnings. When some of the biggest corporations in America earn record profits during a deadly pandemic—because of a deadly pandemic, no less—do they compensate the frontline workers risking their lives? Who benefits from the life-threatening, essential work of the country’s retail workers?

In this report, we analyze compensation to frontline employees at 13 of the 20 biggest retail companies in America. Together, these 13 companies employ more than 6 million workers and include the largest corporations in grocery, big-box retail, home improvement, pharmacies, electronics, and discount retail. We excluded from our analysis seven other top retail companies that either did not have public financial information available or were in retail sectors that were hit hard by the pandemic (such as clothing) and did not provide COVID-19 compensation to workers.

While pay is not the only issue that matters to workers, we chose to focus on compensation in this report. In several dozen interviews we conducted since the start of the pandemic, frontline workers raised the issue of wages and hazard pay more than any other. Other important workers concerns—including safety, benefits, power, and voice—are outside the scope of this report.

With few exceptions, we find that companies have offered only modest or negligible extra compensation to workers while earning windfall profits. Three companies—Best Buy, Target, and Home Depot—bucked this trend and provided more generous compensation to workers during the pandemic both in absolute generosity as well as relative generosity compared to their financial performance. These three companies provided the most COVID-19 compensation to workers through temporary pay increases, bonuses, and permanent wage increases. Together, their frontline workers earned an average of $2.53 extra per hour since March, compared to just $0.21 per hour at CVS Health and $0.83 per hour at Albertsons. All three companies earned double-digit profit growth compared to last year, but at more modest levels than the runaway profits some competitors who were less generous to their workers earned.

Best Buy, Target, and Home Depot are outliers. The other 10 companies in our analysis were far less generous to frontline workers in both relative and absolute terms. Eight of the 13 companies provided less than $1 per hour extra to frontline workers, averaged over the course of the pandemic. Many of the least generous companies were the most financially successful, posting huge profits. Amazon and Walmart combined earned an extra $10.9 billion in profit compared to last year, an increase of 53% and 45%, respectively. Their workers, on the other hand, have received below-average COVID-19-related compensation: an extra $1,369 ($0.95 per hour) and $900 ($0.63 per hour), respectively, over the eight-plus months of the pandemic—representing just 6% pay bumps for full-time workers that earn starting wages. Meanwhile, Amazon and Walmart’s stock prices are up 65% and 41% since the start of the pandemic, adding more than $70 billion to the wealth of Jeff Bezos, Amazon’s CEO, and $45 billion to the Walton family—the country’s richest family, who own more than half of Walmart’s shares.

Amazon and Walmart’s stock prices are up 65% and 41% since the start of the pandemic, adding more than $70 billion to the wealth of Jeff Bezos, Amazon’s CEO, and $45 billion to the Walton family.

The decisions by the companies we analyzed to end hazard pay well before the pandemic was over undermine the pledges that many of these same companies made to invest fairly in workers. Just last year, the CEOs of nearly half of the companies in this report—including Amazon, CVS Health, Home Depot, Target, Walgreens, and Walmart—signed a pledge through the Business Roundtable to move away from narrow “shareholder” capitalism to a broader “stakeholder” capitalism. The pledge stipulated a new vision for the role of the corporation: No longer is the purpose of business solely to maximize profits for shareholders. Instead, corporations should also serve the interest of its workers, alongside the community, customers, and other stakeholders. “This starts with compensating them fairly and providing important benefits,” read the pledge. While signatories Target, Best Buy, and Home Depot are the top three performers in our analysis and made meaningful investments in frontline workers during the pandemic while permanently raising wages, the other four companies that signed the pledge—Amazon, CVS Health, Walgreens, and Walmart—were among the companies that did the least.

The disappointing track record of large retail companies in compensating their frontline workers during the pandemic provides demonstrates the limitations of voluntary corporate action, as well as broader public policy failures. At a time of skyrocketing inequality—in COVID-19 mortality rates, income inequality, unemployment, financial insecurity, racial inequity, and the unequal sacrifices of frontline essential work—the richest companies in America can, and should, do far more. When working could mean dying, frontline workers deserve hazard pay for the duration of the pandemic and a permanent raise to a living wage.

Why retail wages matter

Last year, the retail sector employed nearly one in 10 workers, or 15 million Americans. The 13 companies we analyzed in this report employ over a third of that number. Walmart and Amazon, the two largest retail companies, are also the two largest private employers in the country. Combined, they employ nearly 3 million workers. Due to their outsized influence on the sector, the compensation and treatment of their employees impact even workers they don’t employ.

Retail jobs have become an even more important source of employment during the pandemic. Unemployment levels have skyrocketed for low-wage workers in sectors hit hard by the pandemic recession, such as hospitality and leisure. More than half (51%) of households earning under $50,000 have experienced employment loss during the pandemic, creating even more financial and food insecurity among low-income households. In a recent survey, just under half of low-wage workers reported having trouble paying bills, and about a third had difficulty paying their rent or mortgage.

At a time when tens of millions of people are unemployed and families are struggling, the biggest retail companies are hiring, and providing some of the few employment opportunities available in communities across the country. Many unemployed, low-wage workers have similar education and skill backgrounds as those in the retail sector. With no end in sight to the COVID-19 recession, the importance of the quality of these remaining retail jobs cannot be overstated.

What top retail companies pay frontline workers

While retail jobs can provide an economic lifeline in a time of high joblessness and faltering unemployment relief, the wages are often low and provide little economic stability. Median wages for popular frontline retail jobs (e.g., cashiers, salespersons, and stock clerks) range from $11 to just over $12 per hour—wages so low they would put a family of four below the poverty line. The retail sector’s low wages reflect in part the failure of the federal government to raise the minimum wage above the current $7.25 per hour, despite overwhelming public support for a $15 minimum wage.

Wages at the 13 retail companies in our analysis mostly follow industry averages, with a few notable exceptions. Before the pandemic, when unemployment was low and the labor market was tight, several prominent retail companies raised wages. CVS Health raised its starting wage to $11 per hour in 2018 and Walmart did the same in 2019. Only two companies in our analysis—Costco and Amazon—had a minimum starting wage of $15 per hour before the pandemic.

During the second wave of COVID-19 infections this summer, Target announced it would raise wages from $13 to $15 per hour ahead of its scheduled increase at the end of the year. Best Buy also raised its minimum wage to $15 per hour, announcing the increase the same day it posted double-digit growth in sales compared to last year—noting that “none of this would be possible without the effort and energy of our frontline-employees.” Best Buy, Target, and Costco’s $15 minimum wages are significantly higher than the market wage for retail work, and lead the entire industry. Amazon’s $15 starting wage is just under the average market wage for warehouse laborer jobs ($16.16 per hour).

The remaining seven companies in our analysis do not have public information about their minimum wages, nor do they report starting wages or average wages for specific entry-level positions. The companies we contacted declined our requests to share this data. We therefore drew data from Payscale.com to approximate average hourly wages for cashiers—a typical frontline position that is usually at the bottom of the wage spectrum. Like other job-aggregator sites, Payscale averages self-reported data from employees over many months. The data is imprecise, but is consistent with other self-reporting pay websites such as Indeed.com and Glassdoor. Frontline workers in locations with lower minimum wages likely earn even less than the average hourly wages presented below.

Lisa Harris, a Kroger cashier outside of Richmond, Va., described the financial struggles her grocery colleagues face with the low wages they earn: “I have coworkers who stand all day serving people, and then have to go pay for their own groceries with food stamps. I am very lucky that my boyfriend works in pizza because that is our survival food. If we can’t afford to buy food, he brings home a pizza.”

“I have coworkers who stand all day serving people, and then have to go pay for their own groceries with food stamps”

Lisa Harris, cashier at Kroger

Like many frontline retail workers we interviewed, Harris would like to see her employer raise wages permanently to a living wage. “I think that $15 an hour should be the minimum,” she said in March. “We are heroes every day, and we deserve to be paid as such. We haven’t gone from unskilled labor to essential personnel. We always were essential personnel.”

Hazard pay and extra COVID-19 compensation

When the COVID-19 pandemic hit the U.S. last March, frontline retail jobs were transformed overnight. In most cases, the jobs were still low-paid, but the pandemic gave them a new title: “essential.” State and local governments declared grocery stores, pharmacies, and big-box and retail stores essential businesses, allowing them to remain open when nonessential businesses were closed. Working through the spring shutdown, millions of frontline retail workers faced new hazards in jobs that previously were not considered especially dangerous.

“It is scary,” said Amber Stevens, a grocery cashier in Washington, D.C. “It is very scary. You don’t want to pick up anything at work and bring it back home to your family.”

In recognition of the extraordinary risks their workers were undertaking—and to retain and recruit workers for now-risky jobs—all 13 retail companies in our analysis initially provided extra COVID-19-related compensation to frontline workers as the pandemic began. Commonly referred to as “hazard pay,” the additional compensation came in the form of small, temporary hourly wage increases, typically between $2 and $2.50 per hour, as well as one-off bonuses. Companies used names like “appreciation pay” and “hero pay.”

In addition to temporary hazard pay, a few companies permanently raised wages for workers during the pandemic. In this report, we refer to “COVID-19 compensation” as any additional compensation paid to workers during the pandemic, including permanent pay raises. Hazard pay refers only to temporary pay raises and bonuses tied to the pandemic.

The initial hourly wage increases were popular with frontline workers, although some felt they didn’t go far enough. In more than a dozen interviews, frontline retail workers shared with us a strong desire for receiving hazard pay while putting their lives on the line every shift. They preferred hourly pay increases of several dollars an hour (similar to overtime or holiday hours) rather than occasional bonuses, which fail to compensate workers for each additional hour worked, are less predictable, and are less generous in most cases.

“It should be an hourly raise for the duration of the pandemic,” said a Walmart associate who preferred to remain anonymous, reflecting on the periodic bonuses they received in the spring and summer. “Because for a lot of these people working out there—four or five days a week, eight hours a day, risking their lives so much given how the virus is spreading in the country—$2 to $3 extra an hour is a start.”

By June, nearly every retail company in our analysis ended their temporary wage increases. As nonessential businesses reopened in May and June, retail employers signaled they were returning to “normal”—just weeks before COVID-19 cases spiked during a second peak. The hourly pay increases lasted on average just 79 days, or 11 weeks. As the country heads into yet another infection peak, none of the 13 companies in our analysis are providing hazard pay, beyond the three companies that permanently raised wages.

For most retail workers, hazard pay has been over for months and wages have returned to their pre-pandemic norm. It has been an average of 133 days since the retail workers in our analysis last received hazard pay. Retail workers at large drug store chains have gone the longest (243 days) on average since receiving hazard pay, and received the least amount ($300). Grocery workers follow, with a modest average COVID-19 compensation ($1,175) and more than 140 days on average since hazard pay ended.

Hazard pay from the two home improvement companies—Lowe’s and Home Depot—was more generous, averaging just over $2,700 from bonuses and wage increases, and have also been the most long-lasting. Lowe’s last paid its hourly associates a bonus in November, while Home Depot was the lone company to continue regular pay increases into November through its weekly bonuses. On November 15, however, the company ended weekly bonuses and announced a shift to modest permanent wage increases. Two companies—Best Buy and Target—went the furthest, permanently raising wages to $15 per hour after ending temporary pay bumps in the summer.

Methodology: Amount of temporary hourly increases and bonuses are from company websites. The amount earned from temporary hourly increases was calculated for the weeks the increase was in place and assumes a 40-hour work week. The amount earned from permanent wage increases is calculated using the starting wage or average wage for a cashier working 40 hours per week, excluding pandemic-related temporary wage increases. Calculated from when the company announced the increase through November 19, 2020.

Hazard pay’s abrupt end caused widespread dismay, disappointment, and even anger among workers.

“They stopped giving us the $2 an hour hazard pay,” said Matt Milzman, a Safeway cashier in Washington, D.C., in June. “They gave us all a letter, as if to say, ‘Coronavirus is over, you did it, you all are the real heroes, thank you for your service.’ That is ridiculous—this is not over. We have not completed a tour of service and now things are safe. No, it is still dangerous…It is clear what the priority is: They don’t want to pay us. Now they feel that they don’t have to.”

“The compensation isn’t enough—it is pennies.”

Walmart Associate

“It’s like we are back to nothing now,” said a front-end grocery worker who preferred to remain anonymous, in a June interview. “We were the ones who start during the major thick of it, which is still going on. It’s still a pandemic. For someone to look at me and be like, ‘Well, you’re nothing now, you are what we originally thought about you’—it makes it really hard. We’re still out here, we’re still putting our lives at risk.”

While the extra hazard pay was initially around $2 per hour, the premature end of it means that typical frontline retail workers earned very small pay increases when their COVID-19 compensation is averaged hourly over the course of the pandemic to today. Workers at CVS Health and Walgreens earned as little as a 2% pay raise when averaged from mid-March to mid-November. Entry-level workers at Walmart, Costco, Kroger, Amazon, Ahold Delhaize, and Albertsons earned less than 10% extra.

“To me, it seems like a publicity stunt,” said a Walmart associate who preferred to remain anonymous, in an August interview. “Walmart is not doing enough compared to every other retailer out there. They can afford to do more than they are to show they appreciate the risks we are taking being out on the frontline making them money. The compensation isn’t enough—it is pennies.”


Ending hazard pay harms low-wage workers and racial and gender equity

The termination of hazard pay was especially detrimental to the lowest-paid workers, whose pay had risen meaningfully when temporary hazard pay was active. The modest hazard pay was an important (but often insufficient) step by companies toward adequately compensating their lowest-paid workers. Between the hourly pay increases and bonuses, entry-level retail workers benefited from raises averaging $1.91 per hour—a 17% increase.

“To some people, $2 an hour doesn’t seem like a lot,” said a retail employee who preferred to remain anonymous. “But the extra $2 makes a huge difference for people and their livelihoods. It’s something I can’t comprehend, why they think we’re not worth more. Profits are up big time. I don’t understand why they think it’s okay for people to struggle.”

The end of hazard pay also undermined racial, ethnic, and gender equity. Women and workers of color are overrepresented among the retail frontline workforce. Women make up a significantly larger share of the frontline workforce in general retail stores and at companies such as Target and Walmart than they do in the workforce overall. Amazon and Walmart employ well above-average shares of Black workers (27% and 21%, respectively) compared to the national figure of 12%.

Jeffrey Reid, a meat clerk at Giant Foods outside Washington, D.C., discussed these disparities in an October interview: “You’ve got to look at who’s sitting at the top of all these companies, at all these CEOs. They don’t look like me. Most grocery workers, like myself, the majority of them are Black and brown, and those are the people that are really affected by this coronavirus. Bottom line is that the people who are responsible for these companies thriving and for the sales are the people who are doing the grunt work on a daily basis, out in these stores, keeping these stores stocked, provided customer service at a high level. That’s who makes these companies go, but that’s not who’s reaping the benefits at all. So when you look at these corporations, they want to put profits over workers any day. And that’s where it fails society as a whole.”

Business has boomed during the pandemic

While workers struggle, business at the country’s largest retail companies has boomed during the pandemic. Amidst a recession that permanently closed 400,000 small businesses by June, the enormous size and scale of the top retail companies have positioned them to flourish and expand their market share. E-commerce capabilities allowed top companies to meet the dramatic shifts in shopping behavior. Customers have flocked to the large big-box and retail chains, preferring fewer but larger shopping trips. Home improvement sales have soared as customers stuck at home take on DIY projects, while grocery stores experience record sales as customers eat more meals at home.

Pharmacies and drug stores are the outliers in our analysis. Due to customers making less-expensive purchases and fewer prescriptions being filled as elective procedures are delayed, the retail businesses of CVS Health and Walgreens have experienced uneven growth.

Across the 13 companies in our analysis, revenue was up an average of 14% over last year, while profits rose 39%. Excluding Walgreens—whose business has struggled during the pandemic—profits rose a staggering 46%. Stock prices rose on average 30% since the end of February. In total, the 13 companies reported 2020 profits to date of $67 billion, which is an additional $16.9 billion compared to last year. The two largest companies—Amazon and Walmart—drove the lion’s share of this growth; combined, they reported $10.9 billion in additional profit in the first three quarters of the year compared to last year. This is nearly two-thirds of the total for all 13 companies.

These large retail companies have benefited from government policy and spending. Early in the pandemic, state and local governments declared large retail companies as essential businesses, while many smaller retailers were forced to temporarily shut down. Sales at the top retail companies were further buoyed in the spring and summer by generous federal relief, including enhanced unemployment benefits and stimulus checks. As taxpayer dollars fuel profits, are essential workers benefiting?

Who benefits from windfall profits?

Against this backdrop of staggering profits and growth, we examine how generous the top retail companies have been in providing extra COVID-19 compensation to their frontline workers relative to their financial performance and expenditures.

Companies’ decisions around stock buybacks during the pandemic are illustrative of their priorities and the relative weight they put on shareholder interests, even in extreme times. Of the nine companies that repurchased shares in 2020, all but one at least temporarily suspended their repurchase programs when the pandemic began. Ahold Delhaize continued to repurchase shares throughout the pandemic, buying $860 million in their own stock since March 1, despite ending hazard pay for its employees. In the first three quarters of 2020, the company has spent more than 1.5 times on stock buybacks than on COVID-19 costs for worker safety and compensation.

In the third quarter, Walmart reported $500 million in new share repurchases, but no additional hazard pay for its workers. The cost of Walmart’s recent stock buyback was more than 40% what the company spent on hazard pay bonuses over the previous two quarters, before it ended the extra pay.

Lowe’s plans an “expected repurchase of approximately $3.0 billion of stock” through the fourth quarter of the year, even as the company declined to commit to further COVID-19 bonuses for workers.

After ending its “hero pay” in May, Kroger reported $211 million in stock buybacks in the second quarter, and announced a new $1 billion stock buyback program in September, sending stock prices up. Meanwhile, the company’s frontline grocery workers have gone 181 days without hazard pay, and will enter this new, deadlier phase of the pandemic earning some of the lowest wages in the industry.

By comparing the money companies spent on COVID-19 compensation with their profits, we can see how their absolute generosity compares to their relative generosity, taking into account their financial means. In the short run, extra pay to workers comes at the expense of profits.

We were able to calculate relativeCOVID-19 compensation generosity for the six companies in our analysis that have public data on the total cost of their extra compensation to workers. The numbers are stark—they paint a picture of most companies prioritizing profits and wealth for shareholders over investments in their employees. On average, the six companies’ contribution to compensating workers was less than half of the additional profit earned during the pandemic compared to the previous year.

Amazon and Walmart could have quadrupled the hazard pay they gave their frontline workers and still earned more profit than the previous year.

In other words, Amazon and Walmart could have quadrupled the hazard pay they gave their frontline workers and still earned more profit than the previous year. Albertsons has only reported two quarters of profits; with forthcoming third-quarter profits and no additional hazard pay provided to its workers, its relative generosity will be even less. Only one company—Home Depot—spent more on COVID-19-related pay than it earned in additional profit. Overall, the companies’ COVID-19 compensation to workers totaled just 17% of profits.

Dollar General stands out as performing especially poorly on both relative and absolute generosity. The company could have given its frontline workers COVID-19 bonuses worth 10 times the amount it gave them in the spring and still have earned more profit than the previous year. In the second quarter, Dollar General spent more than eight times the amount of money on stock buybacks in the middle of the pandemic than it spent on COVID-19 compensation in the first half of the year. In their second quarter earnings report, the company stated it expected to repurchase a total of $2.5 billion in stock by the end of the fiscal year ending in January 2021—14 times the amount it pledged to spend on COVID-19 compensation and more than twice the amount it spent last year on share repurchasing.

Another way to examine the relative generosity of companies’ COVID-19 compensation is to compare the growth in workers’ wages to the growth in the companies’ profits and stock prices over the pandemic. The companies we analyzed were already profitable companies; the “growth” in profit reflects the extra profit companies earned during the pandemic that was not passed on to workers through additional wages, benefits, and safety measures.

Overall, the least generous companies were the ones posting the biggest profit growth on average—a finding that isn’t entirely surprising, as wage increases reduce the profits reported in a quarter. The profit of the nine companies whose frontline workers earned less than 10% wage growth since March grew on average by 47%. The average profit growth at more generous companies (those that boosted pay between 12% and 28%) was 21%.

Over the course of the pandemic, stock prices rose much higher on average at the most generous companies than at the less generous companies. Stock prices at the four most generous companies (which boosted wages more than 10%) grew on average 47%, compared an average of 27% stock price growth at the less generous companies.

Target, which tied for first place in our rankings of COVID-19 compensation generosity, also had the highest growth in its stock price. Best Buy and Target’s stock prices have soared even after—and perhaps because of—their investments in workers. Target’s exceptional financial performance in the third quarter demonstrates that generosity toward workers is not inconsistent with strong returns for shareholders. In the company’s recent earnings call, Target’s CEO highlighted the company’s strategic focus on investments in its workforce, calling Target’s team the “secret sauce” and responsible for the best quarter in the company’s 50-year history.

Companies can—and should—do more. But policymakers shouldn’t wait.

If ever there was a moment that called for a rebalancing of profits and people, it is now. Large companies are earning windfall profits, buoyed by federal stimulus. There is a national reckoning on racial equity, while disproportionately Black and brown retail workers earn low wages and risk their lives on the job. Alarm is growing about runaway inequality and the unequal sacrifices shouldered by frontline workers putting their lives on the line.

At the outset of the pandemic, COVID-19 compensation to frontline workers looked promising. Every company in our analysis introduced some form of hazard pay in the spring. The extra pay was modest, averaging just $1.10 per hour since the start of the pandemic across the 13 companies (and was as little as $0.21 per hour). Given the low starting wages that retail workers earn, the extra hazard pay was still not enough for a typical frontline worker to earn a $15 hourly wage at most companies. But it was a start.

Since then, even these small pay increases ended, despite a 39% growth in earnings and nearly $17 billion in additional profit for the companies in this analysis. A few employers stood out as exceptions: Home Depot continued weekly bonuses until mid-November, while two companies—Best Buy and Target—permanently raised wages to $15 per hour. But at most big retail companies, extra hazard pay ended in June, an average of 133 days ago.

The American public overwhelmingly supports pay increases for frontline workers. A May survey showed a surge in respect and admiration for grocery workers and other frontline workers who have carried on during the pandemic, even as millions of Americans sheltered safely at home. A survey by Just Capital found that two-thirds of Americans support companies’ provision of hazard pay. National support for raising the federal minimum wage has grown since the pandemic began, especially among Republicans and independents. A recent survey found that more than seven in 10 Americans support raising the minimum wage, including a majority of Republicans.

You’re making billions and billions of dollars, so spread the wealth. Spread it to the people who are responsible for you making the billions of dollars, for the people who rolling up their sleeves every day, making sure that these companies are running. That’s where you need to put the money.”

Jeffrey Reid

The failure of most companies in our analysis to include frontline workers more fully in their pandemic-enabled success highlights the limitations of capitalism and voluntary corporate action. Policy change and structural reform are needed. Policymakers have many ways to change the rules of the game for corporations, from raising the federal minimum wage to reigning in stock buybacks to enabling workers to collectively bargain. With a new presidential administration incoming and control of the U.S. Senate potentially flipping, federal lawmakers must consider ways to permanently aid our frontline workforce in absence of corporate support.

And even if the most successful retail companies are not legally forced to pay their workers a decent wage, they should anyway. At a time when millions of American families are struggling and hundreds of thousands of small businesses are shuttering, these large companies are earning more profit than ever.

Frontline workers will face even greater risks this winter. These companies should listen to employees like Jeffrey Reid, a meat clerk at a Giant Food outside Washington, D.C., who had this to say in October:

“Know that grocery workers are human,” said Reid. “They take pride in their work. They want to be compensated. They don’t mind a hard day’s work for a fair wage. Just don’t insult a person’s integrity. When these stores are making billions and billions of dollars, and then you want to do stock buybacks and take away the hazard pay, it’s like a slap in their face. It’s just a matter of doing right by your workers. Just do the right thing. You’re making billions and billions of dollars, so spread the wealth. Spread it to the people who are responsible for you making the billions of dollars, for the people who rolling up their sleeves every day, making sure that these companies are running. That’s where you need to put the money.”

About the Authors

Molly Kinder

Molly Kinder

David M. Rubenstein Fellow – Metropolitan Policy Program

Molly Kinder’s research examines the present and future of work, especially for low-wage workers and women. Molly’s current research brings the voices and perspectives of workers at the frontline of COVID-19 to inform policy recommendations to better compensate, protect, and support essential workers.

Laura Stateler

Laura Stateler

Research Assistant – Metropolitan Policy Program

Julia Du

Julia Du

Research Intern – Metropolitan Policy Program