Calif. stores closing after city orders pay hike

Kroger Co. will close two Southern California supermarkets in response to a local ordinance requiring extra pay for certain grocery employees working during the pandemic.

The decision announced by the company Monday follows a unanimous vote last month by the Long Beach City Council mandating a 120-day increase of $4 an hour for employees of supermarkets with at least 300 employees nationwide and more than 15 in Long Beach. Kroger said it will close a Ralphs market and a Food 4 Less on April 17, the Press-Telegram reported.

“As a result of the City of Long Beach’s decision to pass an ordinance mandating Extra Pay for grocery workers, we have made the difficult decision to permanently close long-struggling store locations in Long Beach,” the company said in a statement. The statement added: “This misguided action by the Long Beach City Council oversteps the traditional bargaining process and applies to some, but not all, grocery workers in the city.”

 A city statement characterized Kroger’s decision as “unfortunate for workers, shoppers and the company.”

A similar hazard pay wage increase has been approved by the city of Montebello and is being considered in Los Angeles and Pomona.

A lawsuit filed by the California Grocers Association claims that the Long Beach ordinance interferes with the collective bargaining process between grocery stores and unions representing workers.

An association official said Monday that an increase of $4 an hour represents about a 28% increase in labor costs.

“There’s no way grocers can absorb that big of a cost increase without an offset somewhere else, considering grocers operate with razor-thin margins and many stores already operate in the red,” association CEO Ron Fong said in a statement.

The ordinance was approved in a Jan. 19 meeting in which council members and Mayor Robert Garcia said many groceries gave employees hazard pay in the early stages of the pandemic but phased it out.

$15 minimum wage an anchor on struggling businesses

President Joe Biden has proposed a nationwide $15 minimum wage as part of his so-called “American Rescue Plan.” Talk about bad timing: Raising labor prices on businesses that are struggling to stay afloat is like throwing them a load of bricks instead of a life preserver.

State and local governments raising their minimum wages is one thing, but to more than double the federal minimum, from $7.25 to $15 per hour?

Nearly 1 in every 5 restaurants permanently closed their doors in 2020 as 30 large retail and restaurant companies filed for bankruptcy.

Meanwhile, employment in food services (restaurants and bars) fell 19% in 2020 as retail clothing jobs dropped 24% and accommodations (hotels) jobs plummeted 32%.

Although very few people — only about 1% of all workers and 0.1% of single parents — make the $7.25 minimum wage, a good portion of restaurant, retail and hotel jobs pay less than $15 per hour.

No one would suggest raising the rent on households who are months behind on their payments, so how could raising labor prices help businesses?

Continue reading “$15 minimum wage an anchor on struggling businesses”

Schnatter report vindicates him, indicts Papa John’s, marketing firm

A former FBI director and federal judge has released a 14-page investigative report into the conduct of Papa John’s International Inc. founder and former CEO John Schnatter.

Former FBI head Louis Freeh released the report on Schnatter’s personal and professional conduct Tuesday. The report, commissioned by Schnatter’s attorneys in summer 2019, is the outcome of a year-long investigation into two key events: the Papa John’s and National Football League controversy of 2017 and the release of a recording of Schnatter using a racial slur during a media training session in 2018.

According to a news release, the investigation addressed comments Schnatter made about the NFL in an earnings call in 2017, and determined that he was “falsely construed as critici[zing] the players’ protests” in print and social media, when in fact he was describing “a lack of leadership in failing to resolve the matter to both the players’ and owners’ satisfaction.”

The 2018 media training session was the primary focus of the investigation, the release continued, and Freeh concluded that Schnatter “stress[ed] his disdain for racism” in the meeting and “at no time … express[ed] any beliefs that could be described as bigoted or intolerant.”

Although Schnatter “quoted a third party’s alleged use of the n-word” in order to separate himself from another company founder regarding attitudes on race, he did not “use the word as a racial slur nor was it directed at any person or group,” Freeh continued.

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Florida unemployment rate holds steady, as Orlando tops metro areas for joblessness

Florida’s unemployment rate was unchanged from October at 6.4%, but Orlando recorded the highest number of any metropolitan area in the state at 7.7%.

A report released Friday by the Department of Economic Opportunity shows the continuing powerful effect of the coronavirus pandemic on the state and particularly Central Florida’s tourism-dependent economy.

In all, about 651,000 Floridians were jobless in November, the report says.

In Central Florida, Orange County came in at 8.1% for November, Osceola at 9.7%, Lake at 6.5% and Seminole at 5.7%. Osceola and Orange had the first- and second-highest county rates in the state.

Metro Orlando’s rate topped that of Miami’s, which in previous months had posted the highest percentage of joblessness.

Adrienne Johnston, DEO’s chief of the Bureau of Labor Market Statistics, said seasonal retail hiring was slow this year.

“I think we’re seeing where people are shopping online a little bit more of the season. Businesses did not add as many employees to their payrolls,” Johnson said in a conference call.

The overall U.S. unemployment rate for November was 6.7%.

Continue reading “Florida unemployment rate holds steady, as Orlando tops metro areas for joblessness”

Disney’s theme park division loses $2.4 billion

The coronavirus cost Disney’s theme park division $2.4 billion as Disneyland remains closed, cruise ships are docked and Disney World is open at a limited capacity, the company disclosed Thursday in its quarterly earnings report.

But looking ahead, executives expect the next few months to be busy in Orlando since about 77% of the park reservations are booked for the next quarter, including an almost completely full Thanksgiving holiday.

Disney CEO Bob Chapek said the reopening is going well enough for Disney World to raise occupancy from 25% to 35%, adding he believes it is still possible to maintain 6 feet of social distancing among visitors with the higher number of people allowed inside.

For the company, it’s a hopeful sign as Disney theme parks try to rebound from the global pandemic.

“We’re very pleased by how we have become adapt at operating under these constraints,” Chapek said during Thursday’s earnings call. He said Disney has a proven track record of running theme parks with new strict safety rules several months into the pandemic reopening.

Continue reading “Disney’s theme park division loses $2.4 billion”

Disney fires back at Elizabeth Warren’s letter blasting the company’s 28,000 layoffs

Walt Disney Co. is fighting back after Sen. Elizabeth Warren wrote a scathing open letter this week that slammed the company for reinstating pay for senior executives who had taken salary cuts during the coronavirus pandemic and other financial decisions benefiting shareholders before the company revealed massive layoffs.

The company said in a statement, “Senator Warren’s misinformed letter contains a number of inaccuracies.”

Warren, D-Mass., wrote to Disney CEO Bob Chapek and Bob Iger, the former CEO turned Disney executive chairman, critical of the company’s compensation to executives and how it has treated workers.

“In the years leading up to this crisis, your company prioritized the enrichment of executives and stockholders through hefty compensation packages, and billions of dollars’ worth of dividend payments and stock buybacks, all of which weakened Disney’s financial cushion and ability to retain and pay its front-line workers amid the pandemic,” Warren wrote.

Warren also expressed concerns about the company terminating Florida workers and blaming the layoffs in California on “public health measures, which were implemented to prevent the spread of COVID-19 and save lives.” Disneyland remains closed without an opening date. Disney World theme parks reopened in mid-July.

Disney’s statement responded with, “We’ve unequivocally demonstrated our ability to operate responsibly with strict health and safety protocols in place at all of our theme parks worldwide, with the exception of Disneyland Resort in California, where the State has prevented us from reopening, even though we have reached agreements with unions representing the majority of our Cast Members that would get them back to work.”

Walt Disney Co. announced last month it was laying off 28,000 people across its theme park division.

The company later disclosed details about how it would affect Orlando, revealing nearly 6,700 non-union Disney World employees are losing their jobs in December.

In addition, about 8,860 hourly part-time union employees who had been furloughed will be laid off, according to the company’s largest union coalition, which said those workers can get recalled when the company eventually needs them again.

The layoffs in Florida amount to about 20% of the company’s pre-coronavirus workforce of about 77,000.

Darden Restaurants reduces corporate staff as sales remain down during pandemic

Darden Restaurants revealed Thursday it has cut 11% of its corporate workforce at its Orlando headquarters and in other leadership positions as the owner of Olive Garden continues to endure slower sales during the coronavirus pandemic.

The Olive Garden on North Orlando Avenue in Winter Park, photographed Thursday March 19, 2020. Darden Restaurants, which owns Olive Garden and other restaurant chains, reported quarterly earnings Thursday morning.

The company, which also owns LongHorn Steakhouse and other chains, said Thursday that same-restaurant sales were down 29% for the quarter ending Aug. 30 compared with the same quarter last year, but reported net earnings of $37 million from continuing operations.

At the same time, Darden has brought back thousands of its furloughed hourly employees in the past few months.

Darden shared details on the early retirement incentive program and corporate restructuring that led to the smaller corporate workforce on an earnings call.

“This restructuring resulted in a net 11% reduction in our workforce in the restaurant support center and field operations leadership positions,” CFO Rick Cardenas said, adding the move is expected to save the company between $25 million and $30 million annually.

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Walt Disney World Swan and Dolphin Resort is laying off 1,100 employees

With the professional athletes gone, Walt Disney World Swan and Dolphin Resort is laying off about 1,100 employees because of low occupancy and canceled events in another hit to the tourism industry because of the coronavirus pandemic.

The layoffs are coming after Major League players stayed there this summer.

The Marriott hotel between Epcot and Hollywood Studios called the economic impact “historic, swift and devastating” as it alerted the state as a requirement under federal law for mass layoffs.

The entire Swan portion of the hotel had been home to MLS teams who were staying there in the “bubble” in July and August as they played in a tournament at ESPN Wide World of Sports.

NBA players also became guests at other Disney hotels when the league restarted play in Orlando amid the pandemic.

Even though all Orlando’s theme parks are open, September has been a brutal time for the industry as thousands of employees have recently been let go or placed on indefinite furloughs.

New notices filed this week showed 5,400 Universal employees are furloughed and 1,900 employees at SeaWorld’s Orlando properties are now permanently laid off after being furloughed since March.

The Swan and Dolphin warned the economic impact will carry over into 2021.

The 1,136 positions are in multiple departments of the hotel, including 256 banquet servers, 41 cooks, 67 housekeepers and 88 loss prevention officers. The notice said the layoffs are permanent and effective Nov. 13.

Included are about 135 union employees represented by Teamsters Local 385 who work primarily as servers, housekeepers and laundry attendants. Those employees may be among the first to return if the hotel reverses course and brings back jobs.

At 11%, metro Orlando had the highest regional unemployment rate in the state in August, according to a report released Friday.

Amazon wins FAA approval for Prime Air drone delivery fleet

Amazon.com is testing out the viability of drone delivery for small packages.

Amazon received federal approval to operate its fleet of Prime Air delivery drones, the Federal Aviation Administration said Monday, a milestone that allows the company to expand unmanned package delivery.

The approval will give Amazon broad privileges to “safely and efficiently deliver packages to customers,” the agency said. The certification comes under Part 135 of FAA regulations, which gives Amazon the ability to carry property on small drones “beyond the visual line of sight” of the operator.

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