California is a great place to do business if that business is going out of business. First, we had the story from Long Beach where an additional (mandated $4/hour) “Hero Pay” forced grocery chain, Kroger, to close two stores. Now it’s Los Angeles.
Instead of realizing that higher costs drive tax-generating businesses away, LA has doubled down with the same arbitrary mandate imposed by Long Beach.
Kroger closes five stores in California cities that require ‘hero pay
Los Angeles told retailers and pharmacies they need to pay employees a $5 per hour hazard pay
The hazard pay was due to the Pandemic – the takeaway is that those elected officials believe they know better (from both ends) than those who own and run businesses. So, of course, the Law of Unintended Consequences is teaching them a lesson (reformatted, emphasis mine):
Last month, the Los Angeles City Council approved an emergency ordinance to require grocery stores, retailers, and pharmacies with more than 300 employees nationwide, or more than 10 employees on-site, to offer employees an additional $5 per hour in hazard pay during the coronavirus pandemic. Kroger reacted by planning to close three Los Angeles locations on May 12, citing “hero pay” as the main factor for shuttering the doors.
“The mandate will add an additional $20 million in operating costs over the next 120 days, making it financially unsustainable to continue operating the three underperforming locations,” Kroger said in a statement. “Despite our efforts to overcome the challenges we were already facing at these locations, the extra pay mandate makes it impossible to run a financially sustainable business that ensures our ability to continue serving the Los Angeles community at those three locations with reliable access to affordable, fresh groceries and other essentials.”
Progressives believe is that businesses exist to give jobs to people. Like others on the Left, they KNOW that people should come before “profit.”
Kroger told them that these locations AREN’T making a profit.
Not making a profit, then adding arbitrary labor costs simply because of someone’s stupid “good intentions,” well – that’s just throwing money into the Pacific. Politicians didn’t listen before, and they aren’t listening again. Typically, the politicians aren’t willing to admit to THEIR mistake – it HAS to be someone else’s, and the expected reaction of not “following orders” is in the process:
Two Los Angeles City Council members introduced a motion to investigate Kroger for closing the three L.A. stores.
“The city has an interest in considering whether it should take legislative action to address these closures and potentially future closures of other grocery stores especially in areas of the city that are commonly known as Food Deserts,” the motion introduced by Democratic Councilmen Marqueece Harris-Dawson and Paul Koretz said.
Idiots. What are they going to do after “investigating”? What is it that they believe they can do when a business has already gone belly up?
Will they hold themselves to account that THEY are now the ones that have created the “Food Deserts”? FORCE them to stay open?
Businesses HAVE to stay profitable to stay in business. To pay for repairs, replace failed equipment, bring in even MORE help, or more product REQUIRES profit. True, they need profit to pay for higher taxes as well. But did these two economic illiterates, Democratic Councilmen Marqueece Harris-Dawson and Paul Koretz, consider that?
Of course, no. And nor will they take ownership that they are responsible for the loss of all those jobs?
I guess they were just collateral damage in this spectacular example of the Government not realizing, again, how it can distort the marketplace.
(H/T: The Blaze)
