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Kroger workers experienced hunger, homelessness, and couldn't pay their rent in 2021. Its CEO made $22 million the previous year.

Jan 14, 2022, 20:59 IST
Business Insider
1 in 7 Kroger workers faced homelessness in the past year, and more than a third of them said they were worried about eviction.Courtesy of Veeve
  • 14% of Kroger workers faced homelessness in the past year, according to a survey of 10,000 unionized workers.
  • More than three-quarters of the company's workers are also food insecure.

Kroger CEO Rodney McMullen got a lot richer later year, while most of his company's workers faced homelessness, eviction, or hunger.

A survey by nonprofit Economic Roundtable found more than one-third (36%) of 10,000 employees at Kroger-owned stores in Southern California, Colorado, and Washington said they were worried about eviction. More than three-quarters (78%) are food-insecure. And 1 in 7 Kroger workers faced homelessness in the past year.

"There are workers sleeping in RVs or couch surfing or living in parks somewhere," Peter Dreier, a researcher on the project, told Insider. "Americans go to their local supermarket every week and smile at the person cashing them out, not aware that the person they're talking to is going to sleep in a car after they clock out."

Over 8,000 unionized Kroger's King Soopers employees went on strike this week in Colorado, demanding better wages and working conditions from the country's largest grocery store chain and fourth-largest private employer. Its profits soared during the pandemic, greatly increasing the wealth of McMullen and its shareholders. Kroger employees, however, have endured reduced wages and fewer full-time opportunities from the company.

In a request for comment, a spokesperson for Kroger called the survey "worrisome," and added that Kroger hired more than 100,000 workers in 2020 "as many companies in the hardest-hit sectors like restaurants, hospitality and food service furloughed or dismissed workers."


The spokesperson directed Insider to a study commissioned by the company that says Kroger pays hourly associates more than peers in overall retail industry.

"We are an employer who cares about the whole person and our associates' basic needs," they wrote, referenings two internal programs that provide financial grants to employees experiencing emergency hardship or allows associates to access wages sooner.

Kroger's profits swelled, but wages didn't

Nearly 1 in 5 (18%) Kroger employees said they hadn't paid the previous month's mortgage on time. Roughly 65,000 of 465,000 national workers in 2020 experienced homelessness. All of the workers surveyed hail from unionized Kroger shops, suggesting that non-union workers fare much worse.

The report noted that the decline in "real wages" — wages adjusted for inflation — over the past three decades are largely to blame.

The most experienced Kroger food clerks, the highest paid in the company, saw wages decline 11 to 22 percent across since 1990, according to the study. The average worker in some states saw real pay declines of about 3% in the past few decades, Dreier, who is also an urban policy professor at Occidental College, told Insider.


Meanwhile, the pandemic has been extremely profitable for Kroger, which operates about 2,800 stores under different brands, like Ralph's, King Soopers, and Gerbes. The company earned $4.1 billion in profits in 2020, and by the end of the third quarter of 2021, had $2.28 billion in cash on hand. That's up from the $399 million they had on hand in the first quarter of 2020.

Company executives received raises and bonuses as a result. McMullen made over $22 million, nearly doubling the $12 million he made in 2018. Kroger also gave their stockholders $1.3 billion in stock buybacks in the first three quarters of 2021, the researchers estimate. The median worker pay at Kroger was $24,617 in 2021, they also found, meaning the CEO made 909 times the pay of the average worker.

As the authors note, the Kroger worker rate of food insecurity is seven times higher than the national average, with 78% of them saying they had either very low food security (42%) or low food security (36%).

"The biggest irony and tragedy is that here are people who spend all day around food, and when they go home they can't afford to feed their families adequately," Dreier said.

"There would be days where I would starve myself so that my kids can eat but even that's not enough," a cheese shop clerk at a Kroger store in Colorado wrote in a survey response. "There's been times where I couldn't pay my rent and ended up on the street."


Low pay and unpredictable schedules leave parents and young people with few options

The company paid workers hazard pay in the first two months of the pandemic. The researchers say that this, high turnover, low wages, sporadic scheduling, and limited opportunities for full-time employment, is what keeps workers in poverty.

A quarter of respondents said that they were given a day or less notice about schedule changes. Dreier said this makes it harder for workers to schedule hours for second jobs — 86% of people said that Kroger was the only source of their income.

Younger workers are specifically at risk of homelessness, or are stuck living with their parents.

"Younger workers often can't afford to live alone or outside their family's home," Patrick Burns, a senior researcher at the Economic Roundtable told Insider. When they do fly the coop, they face high rents, housing instability, and new costs of living.

"You see the same for parents who work for Kroger's and can't afford to be on their own, they have to stay with their adult kids." Daniel Flaming, president of the Economic Roundtable, told Insider. "These wages have led to involuntary multigenerational household situations and crowded households."


The Kroger spokesperson wrote in an email: "Yes, there are many individuals in our workforce who are part-time and sought out employment at Kroger for this very flexibility as well as our healthcare benefits that many of our competitors do not offer. Our organization provides an incredible level of upward mobility and advancement opportunities. Associates can truly guide their career based on their desires and ambitions."

Dreier, Burns, and Flaming made multiple policy suggestions for Kroger to combat homelessness and food insecurity for its staff, including giving them higher food discounts, increasing wages, and increasing full time opportunities.

"Kroger's has the flexibility to do better by their employees and it has chosen not to," Dreier said.

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