Companies often know their employees are going through a tough time.

When stories come out about a company’s employees being heavy users of benefits and not earning enough to live on, you might be excused to wonder if the executives actually knew what was going on. Do they pay attention to such things? Do research on their own payroll data? Should the public give the benefit of the doubt?

Like in 2013, when McDonald’s was criticized for a Huffington Post article that was eventually redacted which originally claimed that McDonald’s could double employee salaries by raising the price of a Big Mac by 68 cents.

The redaction occurred because the story was based on what was allegedly a study by a University of Kansas researcher. However, it turned out that the author was an undergraduate student who had not considered employees in franchise operations, and therefore missed “the majority of the payroll and benefits” that the workers earned.

However, what was not redacted was a The Bill Moyers Story that a McDonald’s corporate hotline would suggest that workers who couldn’t make ends meet apply for food stamps and Medicaid, rather than raise their wages.

The audio on which the story and others were based was provided by an issues advocacy group. Was this really common practice? Did the advocacy group set up an unrealistic sting? If a company has a hotline offering suggestions such as dropping off food stalls, it seems reasonable to believe that such advice is hardwired into their software and training and therefore management should be aware of the fact that many workers have been grossly underpaid.

A more recent example comes from a non-profit organization called “More Perfect Union”, which is part of the “More Perfect Union Foundation”, which does not appear to have any information on file with non-profit watchdog groups such than GuideStar or Charity Navigator.

Nevertheless, the group’s website recounts how grocery chain giant Kroger has for years information on the difficulties encountered by many of their workers. The basis of the story is a Reportedly Leaked Fourth Quarter 2017 Corporate Document called Partner Status.

Kroger did not respond to a request asking if the document was genuine, what the company had done since about employee conditions and current figures for government assistance use among workers.

A section of the presentation was titled “Many Kroger associates live below the poverty line.” Among the data the company had gathered was that one in ten clients received federal SNAP or WIC benefits while one in five employees were. Of the people the company hired in 2017, 24% were eligible for the Work Opportunity Tax Credit, meaning the people lived in federally designated areas and were economically disadvantaged (otherwise called poor) in because of receiving benefits from one of the many anti-poverty programs. Kroger earned $20 million a year in tax credits.

In Ohio, the publication notes, Kroger reportedly has the third-highest number of employees receiving SNAP benefits behind Walmart and McDonald’s. And employees’ overall use of government assistance was increasing.

In another section, the company noted that divisions in which the company “offered competitive salaries” had better employee retention. First of all, this should come as no surprise to anyone inside or outside the company. Second, it’s an unspoken admission that many divisions don’t offer competitive salaries.

Incidentally, half of the employees were considered “very loyal buyers”, so a significant portion of these often uncompetitive salaries went back into the company’s coffers to the tune of 2.5% of annual sales. .

The presentation noted that “salaries are important” due to a tight labor market and information that higher-paying divisions had improved retention.

What did the company decide to do at the time? Apparently not that much. This month, employees at nearly 80 Kroger-owned King Soopers grocery stores saw a three week strike for better wages in union negotiations. Some got a Increase of $5 per hourwhich leaves the question of how little they were previously receiving for a $5 raise to be financially feasible for the company.

Kroger said he had spent $300 million in 2020 to raise wages to at least $15 an hour, according to the Cincinnati Enquirer.

And that same year, sales jumped 8.4% to $132.5 billion, with a profit of $2.6 billion in 2020, after spending that $300 million on higher salaries. But that was three years after the presentation of this discussion on workers dependent on federal assistance.

Maybe this benefit of the doubt should be filed away.

Julio V. Miller