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COVID-19

The changing labor market could affect hazard pay

Meghan McCarty Carino May 20, 2020
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An Amazon employee at the company's Staten Island distribution facility. The giant retailer is phasing out its hazard pay. Spencer Platt/Getty Images
COVID-19

The changing labor market could affect hazard pay

Meghan McCarty Carino May 20, 2020
Heard on:
An Amazon employee at the company's Staten Island distribution facility. The giant retailer is phasing out its hazard pay. Spencer Platt/Getty Images
HTML EMBED:
COPY

Pay bumps for essential workers at companies like Amazon, Kroger and Rite Aid are getting rolled back this month, while Target is extending higher wages through July 4. The pay increases are often dubbed “hero pay” or hazard pay — a recognition that the work of grocery store clerks and warehouse pickers has taken on new dimensions of danger in the pandemic. Workers are fighting to keep their bonuses in place, saying that the danger hasn’t gone away. But the labor market could complicate demands for higher pay.

Before the pandemic, Camilo Gutierrez was a server at a Yard House restaurant in Miami. In late March, as lockdowns shut dining rooms, he had his hours cut to zero. He wasn’t really sure if he’d qualify for unemployment benefits.

“Rent was still due, my bills were still due,” he said. “So I tried looking online and saw that Amazon was hiring, and they just gave me the job.” He’s been working as a delivery driver for the past month. 

And there are millions more people in similar positions. Andrew Chamberlain, chief economist with the job site Glassdoor, said he’s seen a surge of interest in grocery, warehouse and delivery jobs from workers in hard-hit industries like hospitality.

“That weakens the pressure on employers to have to pay higher pay or hazard pay,” he said. “Definitely the more unemployed workers you see in the economy, the less bargaining power workers tend to have,” even though the jobs are considered risky.

Atif Siddiqi, CEO of the employee-benefit platform Branch, said a survey of hourly workers the company conducted in late March found most had lost hours or their jobs, but more than half were reluctant to apply for new work “because of fear of exposure and of safety concerns.”

According to the Branch survey, just 36% of hourly employees had applied or had plans to apply for a new job. But even a small share of the millions of unemployed is still a lot of willing people. 

Amazon and Walmart had no problem filling hundreds of thousands of new positions in just a matter of months.

But that was during the period those companies were offering more generous pay, said AnnElizabeth Konkel, an economist with job site Indeed, who’s been tracking searches for these essential jobs.

“There was an initial surge of job-seeker interest,” she said. “And then it really has dwindled off and is now lower than its pre-COVID-era rate.”

If lower wages bring a drop in applications or greater turnover for these jobs, she said there could be an opening to demand better pay despite high unemployment.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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