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Follow the Leaders: Workplace Safety and Pay Policy

By / 4.20.2020

Here’s a good rule of thumb: The companies or industries that actively expand during a recession often become the leaders in the recovery that follows. For example, housing starts actually rose in the 2001 recession, foreshadowing the coming housing boom.  The financial crisis of 2008-09 was also marked by the early years of the Apple iPhone, leading into the App Economy and the wireless boom of the past ten years.

And now, in the middle of the pandemic-caused economic crisis, companies like Amazon, Walmart, and Target continue to hire hundreds of thousands of workers to provide and deliver essential goods. As they add new workers, they also find themselves grappling with the ever-changing medical landscape of how the virus spreads and manifests itself in order to reduce the risks for workers and customers.

Indeed,  the hiring leaders are also turning out to be the leaders in adopting new safety measures and new pay policies for dealing with the pandemic. To be sure, these safety measures are a moving target, as scientists learn more about the behavior of the virus.  What is the new standard of safety that these companies are trail-blazing?

Temperature Checks: One of the main symptoms of COVID-19 is fever.  To spot workers who were suffering from the virus, Amazon was an early adopter of daily temperature checks for workers. Walmart soon followed.  Amazon has also moved towards using thermal cameras in some locations, a technology that might be easier for more companies to adopt.

Masks: Originally the CDC was discouraging non-medical personnel from using masks. That guidance changed. What also changed was a greater appreciation of the importance of controlling asymptomatic spread.  As a result,  companies are starting to distribute masks to slow the spread of coronavirus. Target is distributing masks and gloves to all of its workers at the beginning of their shift. Amazon provides masks to its employees and delivery service partners. Walmart is requiring all employees to wear masks.

Testing: As we noted here, workplace-based testing by businesses is key. Amazon is exploring building what it calls scaleable testing capacity that could be used to regularly test all of its workers.  So far no other company has come out and directly talked about developing their own testing capacity, but it’s clear that others would follow if workplace-based testing became possible.

Pay Policy: Labor markets function even during a pandemic. Leading companies have boosted pay for essential workers offering bonuses and temporary hourly wage hikes. Target raised wages by $2 per hour. Walmart boosted pay in its fulfillment centers by $2 per hour, and added a cash bonus for hourly associates. Amazon increased pay for hourly employees by $2 per hour in the U.S., C$2 per hour in Canada, and €2 per hour in many EU countries, and doubled the regular hourly base pay for every overtime hour worked.

These pay changes were all billed as temporary. But unlike seasonal pay hikes, the pandemic is not going away any time soon.  Moreover, there’s a word that economists use, hysteresis,  which means effects that persist after the initial causes giving rise to the effects are removed.

These companies are now the leaders, setting the trends for safety measures and pay policies. As the U.S. economy reopens,  other businesses will be following their path.