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Consumer and Community Impacts of Hazard Pay Mandates <br />Closing even one supermarket in many neighborhoods would result in residents having to commute <br />significantly farther to find fresh and healthy food at reasonable prices. Tulane University studied <br />the impact of food deserts and concluded that while the majority of items at smaller stores are <br />priced higher than at supermarkets, price is a consideration in deciding where to purchase staple <br />foods, and transportation from a food desert to a supermarket ranges from $5 to $7 per trip.18 <br />Thus, mandating hazard pay would likely impose significant hardships on some communities, <br />especially in lower-income areas. The loss of a grocery store means both fewer jobs for members of <br />the community and higher costs for all residents in the community, who must pay higher local prices <br />or incur additional time and expense to shop. <br />Conclusion <br />Hazard pay initiatives like those passed in the City of Long Beach, and proposed in the City of Los <br />Angeles and in other local jurisdictions, would have far-reaching and negative consequences for <br />businesses, employees and customers of grocery stores in the jurisdictions where levied. They <br />would impose an up -to -28 percent increase in labor costs on an industry that is labor-intensive and <br />operates on very thin profit margins. The increases would be more than double the average profit <br />margins for the grocery industry in 2020, and triple the margins occurring in normal years, and thus <br />would inevitably result in either retail price increases or major employment cutbacks by grocery <br />stores, or a combination of both. If the increased costs were passed forward to consumers, a typical <br />family of four in California would face increased food costs of $400 per year. This would intensify <br />financial pressures already being felt by millions of low- and moderate -income families, many of <br />whom are already cutting back on basic necessities like food due to COVID-19-related losses in jobs <br />and income. Establishments not able to recoup the costs by raising prices would be forced to reduce <br />store hours and associated jobs and hours worked by employees. For a significant number of stores <br />that are already struggling, the only option may be to shutter the store. This would be a "lose -lose" <br />for the community. It would mean fewer jobs with benefits, less local access to reasonably -priced <br />food, and more time and expense spent by customers that would have to travel greater distance to <br />find grocery shopping alternatives. <br />18 "Food Deserts in America (Infographic)," Tulane University, School of Social Work, May 10, 2018. <br />https://socialwork.tulane.edu/blog/food-deserts-in-america <br />11 <br />