Two weeks ago, Mendy Hughes used $ 4 from her thinning bank account to pick up a family dinner at McDonald’s on her day off as a cashier at Walmart, the country’s largest grocery chain. After 12 years with the company, Hughes makes $ 12.85 an hour as a full-time employee, who leaves about $ 200 every two weeks after monthly rent and utilities to cover essentials and food for herself and her three children.
“Eating – it’s stressful,” said Hughes, 47, of Malvern, Arkansas. “I think all day, ‘What do I buy when I get out? [work] that I can afford? What do I get?’ It’s just hard. “
With prices skyrocketing due to pandemic price inflation, Hughes has found that her food budget has essentially dropped to zero, leaving fast food the only affordable option to survive. For example, the cost per pound of ground beef rose about 19 percent nationwide from January through October, according to the Bureau of Labor Statistics (BLS). But the last time Hughes got a raise was last year when Walmart increased their hourly wages by $ 1, an increase of about 8 percent. Walmart’s new wage increases, introduced in September, bring them just 85 cents above the company’s standard starting salary.
“It’s got worse now because things have gotten this way,” said Hughes. “I can’t even afford to buy a shopping cart full of groceries.”
Walmart declined to comment on the wages of certain employees. In September, the company increased its starting wage to $ 12-17 an hour, depending on the market, and it can go as high as $ 34 for people in specialty roles such as shop bakers. The average hourly wage in the company is now $ 16.40, the company said in a statement at the time.
In the twelve months to October, consumer prices rose 6.2 percent, according to the BLS. But according to the latest figures from the ministry, wages and salaries rose only 4.2 percent in the twelve months that ended in September.
The gap between wage growth and price inflation does not mean that all consumers will feel the impact of higher prices on their wallets – workers with the lowest incomes will feel it most. As of May last year, the average hourly wage for retail salespeople was $ 13.02 an hour, or about $ 27,172 in full-time annual wages, while computer and IT workers had an average annual wage of $ 151,150, according to the latest data the BLS.
“The main takeaway for [the hospitality and retail] Industries is that real wages don’t keep up with inflation and these jobs are barely on the water, “said Nela Richardson, chief economist at ADP.” When you make more money, price increases take less money on your budget. But when you’re earning a lower salary, inflation is a significant dent in your overall income. “
The pandemic has exposed an economic gap between people who can work from home and those who cannot. Those who couldn’t work from home – retail clerks, bus drivers, delivery drivers – were more likely to have contracted the coronavirus, had fewer savings or benefits to support them when they got sick, and were more likely to have lost income. This emerges from a report from a federal advisory group to the State Secretary for Health and Social Affairs from September. According to the United Food and Commercial Workers International Union, from March 2020 to August 2021, 198 out of 835,000 food workers died of Covid-19 and at least 43,900 were infected or exposed.
Meanwhile, the food industry had a record year of sales as people ducked at home to avoid the virus. The industry traditionally grows by 1 to 2 percent per year, according to the management consultancy McKinsey & Co. But the North American food industry grew by a whopping 12 percent last year. Kroger had sales of 135 billion US dollars last year, up 10.6 percent from 122 billion US dollars in 2019. Costco sales rose 9 percent last year to approximately 163 billion US dollars, up from $ 149 billion last year. Walmart’s grocery sales rose $ 3.6 billion in the third quarter of this year alone, the strongest quarterly growth in six quarters, Walmart’s chief financial officer said on a conference call to investors last week.
Bianca Agustin, corporate accountability director of the nonprofit union United for Respect, said in an email that the burden of rising costs of low wages is “an urgent reminder for Congress to raise the federal minimum wage to at least $ 15. ”
“This is the bare minimum to ensure that important workers and working-class families are involved in the economic recovery,” she said.
There has been a wave of calls for a federal minimum wage hike as the grueling pandemic has put food workers like Hughes on the front lines of the virus and fueled political hostility to security protocols like masks. In response to the added work risk of contracting the virus, some retailers have temporarily increased their sick pay and introduced hazard compensation for frontline workers a few months after the pandemic last year. However, in June, Albertsons, Kroger and Fred Meyer were some of the grocers who ended their bonuses for working through the pandemic.
When the pandemic passed its one-year mark, retail workers drove out of the industry due to low wages and burnout. The Department of Labor reported that 730,000 retail workers left their jobs in August and 685,000 in September. In response, retail companies sought to raise wages to keep workers and improved benefits to attract applicants to fill a growing list of vacancies. Costco raised its minimum hourly wage to $ 17 last month. Natural Grocers announced last month that it was increasing its starting hourly wage to $ 14-18. Aldi announced in August that it would raise its average starting hourly wage to $ 15.
“Wage increases were hopeful signs,” said Gary Burtless, a senior fellow in economic studies at the Brookings Institution. “Though it’s not widespread enough right now to be reflected in the economy.”
At the same time, skyrocketing consumer demand for goods, a global supply chain crisis and labor shortages have resulted in higher prices. Price inflation reached 6.2 percent last month, its highest level in more than 30 years.
When it comes to wage increases, hospitality workers saw a 1 percent year-over-year increase in September, Richardson said. Commerce and retail wages rose 6.7 percent in September year over year, meaning wages in the industry are barely keeping up with prices, she said.
The gap between hourly wages and food costs means that many grocery workers face food they cannot afford on a daily basis.
“It’s awful to go through baskets and baskets of groceries when I know I can’t buy them,” said Hughes.
While job changes have resulted in higher wages for some, leisure and hospitality and retail are unique segments as job changes are generally not as profitable as other industries, Richardson said. The few benefits some workers receive from their food employers are too valuable to be abandoned for lower-performing, better-paying jobs.
A Kroger store manager in Tennessee who wants to remain anonymous because she can’t speak to the media said she often skips breakfast and eats a few crackers to break her budget. She makes $ 10 an hour part-time while attending community college. But for a self-financed college student, the benefits of the company outweigh the low salary.
“I’ve looked at other jobs,” she said. “But Kroger has certain benefits that I want in case I ever need them, like health insurance, and if something goes wrong with my school scholarship, there is tuition reimbursement.”
Kristal Howard, a spokesman for Kroger, said in an email that the company has invested $ 800 million in wages and training over the past three years. It is investing $ 350 million more this year to bring its average national wage to more than $ 16 an hour. It also introduced one-time pandemic bonuses of $ 1,200 for part-time workers and $ 1,760 for full-time workers.
Hughes said she was considering leaving Walmart, but that she only gained full-time status with the company last year, which comes with long-term and short-term disability benefits.
“It’s hard to even pay my bills and get through,” she said. “It’s just about figuring out how to get through everyday life and trying to budget, how I can afford the food.”