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Dollar General, Dollar Tree urged to enhance employee safety, wages

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Dollar General and Dollar Tree stores

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Two activist investment firms are calling on Dollar General and Dollar Tree shareholders to approve a pair of resolutions aiming to enhance employee safety and wages, the firms said Tuesday. 

Dollar General Proposal 7, led by Domini Impact Investments, calls for an independent audit into employee safety and wellbeing. It’s going to be voted on in the course of the company’s annual shareholder meeting on May 31. 

Dollar Tree Proposal 7, led by United Church Funds, calls for the creation of a wages and inequality report and. It’s going to go before shareholders in the course of the retailer’s annual meeting on June 13. 

The resolutions aim to deal with longstanding workplace safety and wage concerns which have plagued employees of the growing discount chains, that are increasing store counts faster than another retailer. Collectively, they employ greater than 377,000 employees nationwide, company filings show. 

Dollar General is currently facing greater than $16 million in fines from the federal Occupational Safety and Health Administration for safety hazards, including blocked fire exits, blocked electrical outlets and dangerous levels of clutter. 

“It is too dangerous within the stores that we work in,” David Williams, a Dollar General stocker, said during a panel event Tuesday. “It is a dire need and it is unnecessary to all the time look behind your back and all the time attempt to do your job but at the identical time all the time attempting to ensure you are secure as well.”

Federal regulators have repeatedly found similar violations at Dollar General stores across the country, prompting OSHA to label it a “severe violator” of workplace safety rules. It is a designation considered “unprecedented” and “rare” for an organization of its size and stature, said Debbie Berkowitz, a former chief of staff and senior policy advisor at OSHA. 

“[It’s] a program for the worst safety violators within the nation. It is completely rare for a big employer with many work sites to be within the severe violator program. Most firms of their program are small construction firms,” said Berkowitz, who can also be a fellow on the Kalmanovitz Initiative at Georgetown.

“OSHA rarely finds the identical hazards or cites the identical company so persistently and for a similar violation. Normally firms attempt to correct safety hazards that endanger employees,” she said.

Berkowitz identified that OSHA fines are notoriously low. Considering the $37.84 billion in sales Dollar General posted in fiscal 2022, the penalties are unlikely to have a significant impact on its balance sheet. 

The retailer didn’t return a request for comment. It’s currently in settlement negotiations with OSHA. Its board has called on shareholders to vote “against” Domini’s resolution, proxy filings show.

A client walks by an indication displaying $1.25 price, posted on the shelves of a Dollar Tree store in Alhambra, California, December 10, 2021. The shop is thought for its $1 items, but resulting from inflation raised prices to $1.25.

FREDERIC J. BROWN | AFP | Getty Images

Dollar General previously told CNBC it “usually review[s] and refine[s] our safety programs, and reinforce[s] them through training, ongoing communication, recognition and accountability.”

“Once we learn of situations where we have now did not live as much as this commitment, we work to timely address the problem and make sure that the corporate’s expectations regarding safety are clearly communicated, understood and implemented,” a spokesperson said. 

Kenny, a Dollar Tree worker, said that he’s only given 15 hours every week and brings in about $600 a month. The low wages and the lack to get full-time hours caused him to lose his housing and move in along with his parents.

“You may’t expect most working adults, even teenagers, to make that little money because it is not going to assist in the grand scheme of things,” said Kenny, who didn’t share his last name. 

Matthew Illian, the director of responsible investing at United Church Funds, said Dollar Tree doesn’t have a minimum wage commitment unlike a few of its peers. 

Costco, Goal, Best Buy, Amazon, IKEA and Starbucks all have a guaranteed wage of at the very least $15 an hour, while Walmart has committed to $14 an hour. Nevertheless, dollar stores on the whole differ from a lot of those retailers due to their heavy footprint in rural communities, which are likely to have lower costs of living.

Still, in a lot of those locales, the dollar store is one in all the few retailers on the town, so there’s less competitive pressure to enhance wages, safety and even quality of products.

Illian argued investors profit from income equality – and pointed to a study conducted by the Economic Policy Institute that found income inequality drags on GDP by 2% to 4% a 12 months. 

“The economy overall can be doing higher. Meaning more individuals with more cash of their pockets, spending that cash in additional places,” said Illian. “So we’re asking for Dollar Tree to take a look at how their compensation practices are impacting the returns of a diversified investor.”

Dollar Tree declined to comment. Its board has called on shareholders to vote “against” United Church Fund’s resolution, in line with proxy filings.

— Additional reporting by CNBC’s Melissa Repko

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