Two Minnesota retail giants pay their workers when it counts most

Employer reviews on sites such as Indeed don't look much like a scientific sampling, just the thoughts of employees crabby enough to bother with posting a terrible "1" rating or happy enough to give their employer a "5."

That's why a recent rating from a Best Buy Co. service associate in Utah really catches the eye. Best Buy Co., it said, "is great by retail standards."

Maybe that's the best way to think about the conclusions of a new report by a Washington think tank on retail worker pay in this terrible year of a pandemic. Turns out Best Buy really is doing great — by retail standards.

Of 13 big retailers reviewed by research staff of the Washington, D.C. -based Brookings Institution, Best Buy was the top giver of additional compensation to front-line workers, about $4,400 from mid-March through the week before Thanksgiving.

Ranked with Best Buy at the top of the overall study was Target, with only Home Depot close to these Twin Cities-based retailers.

Target and Home Depot both came up with what the study called "all COVID-19 compensation" of an additional $3,200 for full-time, front-line employees.

Way at the bottom, even rated below companies the report referred to as laggards, were Amazon.com, CVS Health, Walmart and Dollar General.

The additional pay studied included base wage raises, bonuses and temporary increases. Employers were more likely to call any short-term boost in wages something other than hazard pay even though front-line work this year could be considered less than safe.

The state of Minnesota said retail stores are a minor factor in COVID-19 spread, as masks are mandated and most stores have taken further safety measures. Still, the Centers for Disease Control and Prevention last month updated guidance to suggest consumers shop online in the days leading up to Christmas, use curbside pickup or go to open-air markets while wearing masks.

Sales associates, cashiers and stockers, of course, are in their stores the whole shift.

About 12% of Minnesota's private-sector workforce held some job in the retailing sector as of October. And all-year staffers on the front line come face to face with everyone who walks in the door, including those people who seem to have trouble thinking clearly enough to wear a mask.

In July a story about a couple in southwest Minnesota who found themselves banned from Walmart for wearing face coverings emblazoned with swastikas — apparently as a protest — went international.

That was not long after a shopper at Menards in Mankato was charged with assault and disorderly conduct for allegedly slapping a Menards worker who had only tried to enforce the Wisconsin-based retailer's mask-wearing policy.

The point the Brookings report made is that these workers who had to put up with shoppers willing to hit them were putting their health on the line for hourly pay that averages just over $11 for cashiers to about $14 for stock and material movers.

Their employers, meanwhile, seem to have caught a big financial tailwind this year as the coronavirus kept spreading.

With homes having to serve as classrooms and workplaces, too, home-improvement sales boomed and so did business at Home Depot, with same-store sales increasing about 25% in the latest quarter.

Working from home and having to rely as never before on gaming or streaming shows from Netflix and Hulu to keep the family entertained meant sales of new electronics have been strong at Best Buy, too.

Stores that sold some of everything people needed this year — Amazon.com, Walmart and Target — have also done great.

Target's comparable sales — a basic measure of sales performance that tries to take out the impact of things like new stores — grew about 21% in its most recent quarter.

These companies as a group have done so well this year "stock prices are up an average of 33%," Brookings report authors Molly Kinder, Laura Stateler and Julia Du wrote. "And with few exceptions, front-line retail workers have seen little of this windfall."

The exceptions start with Best Buy, which early on came up with additional appreciation pay and then in early August moved to $15 per hour as a minimum, up from around $11 for cashiers.

Target started with $2 an hour of additional wage and then went to $15 an hour minimum, too.

It also paid bonuses, with the latest of $200 announced in October.

A bonus is actually a pretty savvy way to raise pay in an unusually good year, as anybody who's ever run a profitable business knows it's far easier to add costs like a bigger building or higher base wages than it is to take costs out when business trends turn down.

When the big companies such as Best Buy and Home Depot raised pay permanently, they used the term investment to describe what they were doing.

Ordinarily, this is a form of corporate PR abuse of the language, because you can't actually invest in an operating expense. At the end of any shift, those eight hours of work are gone.

It's like claiming to "invest" in higher-cost electricity, which obviously provides no future benefits once it's been used to keep the store lights on for an hour.

After thinking this through, though, maybe investment is the right term to describe higher wages across the front line.

A notion out of the field of economics suggests that paying more than the rest of the market can pay off by attracting better candidates, cutting down on employee turnover and even reducing the need for so many supervisors.

Retailers probably can't make front-line jobs the kind of "good" jobs the authors of that sharply critical Brookings report would really want.

Even $15 an hour doesn't seem adequate when the state of Minnesota's numbers suggest that just getting by in the Twin Cities takes more than $19 an hour for a typical household of one full-time worker and one part-time worker.

But if turning these hard retail jobs into great jobs seems out of reach, these companies have shown they can afford to make them a lot better jobs.

lee.schafer@startribune.com 612-673-4302