This drop in wages is a result of labor market power (or monopsony or buyer power, if you want to get fancy). On average, all grocery workers in affected markets will lose about $450 per year in wage income The total annual earnings of grocery store workers will fall by $334 million in affected metropolitan areas īecause Kroger and Albertsons employ about one quarter of all grocery store employees, most of the wage losses caused by the merger will be a negative externality that falls on grocery store workers employed by other firms. The merger will lower wages for 746,000 grocery store workers in over 50 metropolitan areas of the U.S. Justifying those concerns, a recently released study from the Economic Policy Institute shows that workers across the grocery sector would lose more than $330 million annually should the merger be allowed to proceed. But another concern is that the merger will specifically harm workers, as the newly-merged entity will have significant power over labor markets too, giving it the ability to push down wages, not just for those who work at Kroger or Albertson’s owned stores, but across the industry. One of the concerns raised, of course, is that the merger will result in higher prices, as the new grocery giant monopolizes local markets, which has particular salience in a moment of higher than normal food inflation. It would be the largest merger in retail grocer history, and so has rightfully drawn antitrust scrutiny from Congress, the Federal Trade Commission, and several state attorneys general, as well as a private antitrust action on behalf of grocery buyers. If allowed, the merger would bring a host of brands, including Safeway, Shaws, and Harris-Teeter, under the umbrella of one grocery behemoth. If you like this post, be sure to sign up for the monthly Hometown Advantage newsletter for our latest reporting and research.Back in October, Kroger and Albertsons, two of the biggest supermarket chain corporations in the U.S., announced they intend to merge. She concludes, “there is a sea change underway in antitrust policy and I think there is a high likelihood that this merger is going to be challenged.” Stacy echoes this thinking - this experiment has failed many Americans, but we have the power to stop it. And what have we gotten from it? Less growth, weakened investment, fewer small businesses… I believe the experiment failed.” As President Biden once noted, “We’re now 40 years into the experiment of letting giant corporations accumulate more and more power. Meanwhile, farmers and independent grocers would have a much tougher time making profits because of the new mega-company’s market power. The combined Kroger-Albertsons would likely close some of those stores, leading to massive layoffs, including the potential loss of union jobs. If the merger goes through, stores in some cities and towns that were once competing would be owned by the same company. Kroger and Albertsons operate dozens of different regional supermarket chains. “Maybe find some ways to cut costs, but that’s mostly because they’re cutting jobs, pushing down wages, and squeezing farmers.” Not only are we losers as consumers, but as Stacy argues, “we’re also losers as people who need to make a living.” In early October when Kroger announced its proposed merger with Albertsons, Stacy knew that the company’s statement promising to pass savings on to consumers was blatantly false. “This is the standard playbook with a merger,” Co-Director Stacy Mitchell explains on Pitchfork Economics. For the last forty years, merging companies have convinced regulatory agencies that their merger will be better for customers - most often pledging that it will lower prices.
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