Despite obstacles, essential worker wages are up slightly during COVID-19

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Vons employee, Roger McCullough poses for portraits on Friday, Sept. 4, 2020 in Santee, Calif. - Jarrod Valliere/San Diego Union-Tribune/TNS

SAN DIEGO — In the early days of the pandemic, grocery worker Roger McCullough was taken aback by the praise he’d regularly receive from customers. Even a member of the military thanked him for his service. But, then things started to change.

McCullough, 55, who’d worked at Vons for 30 years, said customers grew more frustrated with workers about everything from having to wear a mask to items being out of stock. It didn’t help when his Vons made national news for a customer wearing a Ku Klux Klan hood in the store, and people criticized workers for not beating up the hood-wearing patron.

But, it wasn’t all bad. McCullough’s union was able to negotiate an extra $2 an hour in pay for workers from mid-March to mid-June. He used the money to pay bills and support his fiancée who is on disability.

“It was fantastic,” he said. “It was combat pay, basically.”

How essential workers have fared during the pandemic, McCullough quickly learned, can’t be measured entirely in dollars and cents, but it’s notable that at a time when joblessness has soared, they have seen their pay go up.

According to the Federal Reserve Bank of Atlanta, workers — from architects to gas station clerks — saw their pay from March to July increase an annualized average of 3.6 percent. Because the Fed’s Wage Tracker looks at the same employees over time and in so doing excludes COVID-related layoffs, it provides a clearer picture of what has happened to people still working.

The data also are helpful in providing a trend line for essential worker pay because those workers represent the majority of those who have been employed during the pandemic.

While it will still take months or years to get a full picture of wages during the pandemic — especially down to the local level — the Atlanta Fed numbers at least offer some hope that the current crisis will not be as devastating financially as the grim unemployment numbers indicate.

John Robertson, senior policy adviser and economist for the Atlanta Fed, points out that even though wage growth has moderated slightly, it has not tanked during the pandemic for those still working.

“What I was initially concerned with is that, beyond workers being laid off, the workers still there would be basically (given) wage freezes,” he said. “But we aren’t actually seeing a big increase in the fraction of workers saying their wage was the same a year ago.”

At least some of the wage gains were the result of workers pushing back. Todd Walters, president of United Food and Commercial Workers’ San Diego-based Local 135, said it bargained over pay, increased safety and cleaning, and a health insurance trust fund to help workers if they get sick.

“We were literally on the phone, or on Zoom meetings, with these employers for three solid weeks,” Walters said.

The union was able to get an extra $2 an hour at Rite Aid, Albertsons/Vons, Ralphs, Food4Less, Gelson’s and Stater Bros. Most of the “hero pay” ran roughly from the middle of March to some time in June, although the union is now asking that it be reinstated as the pandemic continues. Walters said it was a massive win because last year during negotiations they were only able to get 50 cents-an-hour raises for people at the top of the pay scale.

“We got $2 an hour for everybody,” he said. “We’ve never seen $2 an hour come across the board like that. It was huge.”

Robertson at the Atlanta Fed said it is anyone’s guess what will happen as the year goes on, but it is promising to see that wages aren’t following a similar trajectory during the Great Recession when wage freezes were more prevalent as companies were doing anything to cut costs.

“That doesn’t seem to be playing out the same way, so far, according to this data,” he said.

More detailed information on what happened with wages in San Diego County during COVID-19 is likely another year away because the schedule for data from the U.S. Bureau of Labor Statistics lags. Its most recent number for San Diego County is from May 2019, which showed a modest wage gain of 1.4 percent.

The closest available data set that gives a more recent picture of what has happened locally in the last few months comes from the Atlanta Fed, which shows wages for the West Coast — described as the “Pacific” region — up 4.2% annually in July. That outpaces the national average of 3.6 percent.

Still, wages have not been totally immune to the pandemic. Pacific region pay was up nearly 5% annually almost a year ago, illustrating a slowdown in increases so far this year.

More importantly for some, higher wages are not likely to ease the minds of fearful workers who are potentially exposed to people carrying the virus.

Esther Lopez, a sales manager at Ralphs in Bonita, said the extra $2 an hour for a few months was great but it is hard to separate the financial gain from her nervousness about catching COVID-19. She said there are still customers who won’t wear masks, or don’t wear them correctly.

“We have great customers that thank us. We appreciate it and they are like our extended family,” she said. “Then we have customers that are angry, and it’s not our fault we are in the middle of a pandemic.”

The Atlanta Fed also tracks pay by industry, sex, age and race. It does not break that down by region, because it considers the sample size too small for analysis, but it nevertheless provides good insight into which occupations have done relatively well during the pandemic.

Construction has seen the biggest increases in wages, up 4.3% annually, as of July, based on the Fed’s 12-month moving averages. Construction was considered an essential job, and many in residential construction have been busier than ever with home prices rising in all major metro markets. San Diego County built nearly 4,000 housing units in the first six months of the year, an increase of 1.6% from the same time in 2019.

Finance and business services were also up 4.3 percent. Jobs in that category include banking, real estate and legal services work. Other areas that saw pay increase were public administration, 4 percent; trade and transportation, 3.6 percent; manufacturing, 3.3 percent; and education and health, 3.2 percent.

The data is based on people who kept their jobs, so it can seem a bit misleading, given the huge job losses in some sectors. For instance, those who have remain employed in the especially hard hit leisure and hospitality sector had seen wages increase 3.1% annually as of July. Still, it is the lowest increase of any category studied. For San Diego County, the overall job losses in hospitality were especially large: 60,800 jobs gone on an annual basis as of July.

Other highlights of the Fed pay data (on an annual basis as of July) are:

—Wages were up 3.7% for men compared with 3.5% for women.

—Workers ages 16 to 24 saw the biggest increases, up 7.8 percent. Wages for 25- to 54-year-olds were up 3.9 percent, and for those 55 and older, the pay increase slid to 2.5 percent.

—In the category of race, the Fed only breaks data down by non-White and White, with non-White workers seeing the biggest gains throughout the pandemic. It found that as of July, non-White workers had seen a 3.8% increase compared with 3.6% for White workers.

For McCullough at Vons, he said one of his biggest concerns in the coming months is a change in attitude from some customers.

“I would like us all to calm down and take a breath for a minute,” he said. “I’m giving my all for the general public to make sure they are safe, happy and fed. But, that’s as far as my job can help them.”

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©2020 The San Diego Union-Tribune