NGA gives thumbs-down to $15 minimum wage, thumbs-up to wider SNAP online access for grocers

On two key issues linked to the COVID-19 pandemic’s impact, the National Grocers Association (NGA) opposes raising the federal minimum wage to $15 — part of President Joe Biden’s $1.9 trillion economic rescue plan — and supports efforts by Congress to expand independent grocer access to the Supplemental Nutrition Assistance Program (SNAP) online purchasing program.

NGA this week sent a letter to the House Education and Labor Committee saying that the inclusion of a sharp minimum wage hike in its fiscal 2021 budget reconciliation bill would cause financial distress for many independent grocers, despite “much-needed provisions” in the legislation to bolster federal nutrition programs. The bill, approved by the committee, is slated to be merged into a broad economic rescue package and go to the House for a vote later this month. The association said it expects the legislation to pass the House and then go the Senate.

“NGA strongly opposes increasing the federal minimum wage to $15 per hour because it would harm small businesses and reduce food access in disadvantaged communities,” Christopher Jones (left), senior vice president of government relations and counsel at NGA, wrote in the letter to House Education and Labor Committee Chairman Robert “Bobby” Scott (D., Va.) and Ranking Member Virginia Foxx (R.-N.C.).

Related:FMI, NGA give welcome to new Biden administration

NGA would support a higher federal minimum wage, but the proposed increase is too much for members, according to Jones. He noted that an increase could have a “very real and significant impact on their business,” since net margins for the supermarket industry are about 1% to 2%.

“More than doubling the current hourly rate is impractical for a large portion of NGA’s members, many of whom are small, independent businesses serving lower-cost-of-living geographic regions across the country,” Jones explained. “In response to a drastic increase in the minimum wage, many independent supermarkets would struggle to compete or accelerate the pace of automation in their stores and create an unlevel playing field between large and small businesses.”

On Tuesday, NGA also led a meeting between West Virginia grocers and legislative staff of Sen. Joe Manchin’s (D., W.Va.). The association urged Manchin, a key swing vote in the Senate, to oppose the $15 minimum wage. Cason Edwards, co-owner of St. Marys Galaxy Food Center in St. Marys, W.Va., and other NGA members at the meeting said a “one-size-fits-all federal wage” would harm states like West Virginia, where high rates of food insecurity create a strong reliance on access provided by independent grocers.

Related:NGA seeks more independent grocers for SNAP online purchasing

“NGA urges the committee work to identify a more workable and realistic federal wage policy that allows independent supermarkets to continue to invest in their companies, employees and communities,” Jones said in the letter.

St. Marys Galaxy Food Center (W.Va.) co-owner Cason Edwards participated in a meeting on the minimum wage this week with staff of Sen. Joe Manchin.

Yesterday, NGA hailed the reintroduction of the Expanding SNAP Options Act by U.S. Sens. Dick Durbin (D., Ill.) and Tammy Duckworth (D., Ill.) as well as the House Agriculture Committee’s advancement of its budget reconciliation bill. Both measures provide significant funding for the U.S. Department of Agriculture’s SNAP Online Purchasing Program, in the form of technical assistance for small and midsize retailers, NGA noted.

Under the program, launched by the USDA's Food and Nutrition Service (FNS) in April 2019, 47 states and the District of Columbia now allow SNAP benefits recipients to shop and pay for groceries online from authorized retailers using their electronic benefits transfer (EBT) cards. So far, only a handful of independent grocers are participating in the program, whose nationally authorized retailers include Walmart, Amazon and Aldi.

The Expanding SNAP Options Act, relaunched in the Senate on Tuesday, was originally introduced last July with House companion legislation sponsored by Rep. Robin Kelly (D., Ill.), who is slated to reintroduce a companion bill soon, NGA reported. The association said it has been working with congressional offices on potential solutions to obstacles that independent grocers face in offering the program.

“The National Grocers Association applauds the effort by Sens. Durbin and Duckworth to expand access to the SNAP online purchasing program. NGA is particularly pleased with the provision that would create a technical assistance center to help more independent community grocers offer SNAP online purchasing,” stated Molly Pfaffenroth, senior director of government relations for NGA. “We look forward to working with Congress to help broaden access to nutritious food for those Americans who need it most.”

SNAP online purchasing has presented a range of challenges for independent grocers, including requirements for certain point-of-sale technology and website functions, testing at each store location, financial resources for implementing and running the program, and a lengthy application and approval process, according to NGA. The Senate bill would require the U.S. secretary of agriculture to implement online SNAP purchasing in all states; provide $25 million to help smaller retailers develop and maintain an online and app-based portal for EBT redemption in offering products for online SNAP purchasing; and earmark $75 million for a USDA Technical Assistance Center to facilitate and provide more information about SNAP online purchasing.

“Independent community grocers are the backbone of their communities,” NGA President and CEO Greg Ferrara said in a statement. “As essential partners in the SNAP food delivery system, they serve millions of low-income households, including families with children, the elderly and disabled. Supermarkets have seen unprecedented demand for online services during the pandemic, and while many retailers have launched innovative solutions, such as curbside and home delivery, all independent grocers must have an opportunity to offer eligible food products and process SNAP payments online.”

NGA said the House Agriculture Committee’s fiscal year 2021 budget reconciliation bill, approved Wednesday evening, aims to provide $25 million to promote technological improvements for SNAP online purchasing and related tech upgrades and assistance for retailers.

“[Committee] Chairman David Scott is a strong supporter of equitable access to fresh, healthy food in rural and urban areas,” Pfaffenroth added. “We appreciate recognition by the chairman and the committee of the important role online grocery shopping plays in helping low-income families acquire the groceries they need.”