Dollar General and Dollar Tree stores
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Two activist investment firms appeal Dollar General And Money tree shareholders to pass a pair of resolutions aimed at improving worker safety and wages, the companies said Tuesday.
Dollar General Proposal 7, led by Domini Impact Investments, calls for an independent audit of employee safety and well-being. It will be voted on at the company’s annual shareholders’ meeting on May 31.
Dollar Tree Proposal 7, led by United Church Funds, calls for a report on wages and inequality. It will go before shareholders at the retailer’s annual meeting on June 13.
The resolutions are designed to address long-standing concerns about workplace safety and wages that have plagued workers at growing discount chains, which are expanding store numbers faster than any other retailer. Collectively, they employ more than 377,000 workers nationwide, company documents show.
Dollar General is currently facing more than $16 million in fines from the federal Occupational Safety and Health Administration for safety hazards, including blocked emergency exits, blocked electrical outlets and dangerous levels of clutter.
“It’s way too dangerous in the stores that we work in,” said David Williams, a stock manager for Dollar General, at a panel event Tuesday. “It’s much needed and there’s no point in always looking behind your back and always doing your job, but at the same time always trying to make sure you’re safe too.”
Federal regulators have repeatedly found similar violations at Dollar General stores across the country, prompting OSHA to label it a “serious violator” of workplace safety rules. It’s a designation considered “unprecedented” and “rare” for a company 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 security offenders in the country. It is rare for a large employer with many workplaces to participate in the serious offender program. Most of the companies in their program are small construction companies,” said Berkowitz, who is also a fellow with the Kalmanovitz Initiative at Georgetown University.
“OSHA rarely finds the same hazards or cites the same company so often and for the same violation. Typically, companies try to correct safety hazards that put workers at risk,” she said.
Berkowitz pointed out that OSHA fines are notoriously low. Given the $37.84 billion in sales Dollar General posted in fiscal year 2022, the fines are unlikely to have a major impact on its balance sheet.
The retailer did not respond to a request for comment. It is currently in settlement negotiations with OSHA. The board has called on shareholders to vote “against” Domini’s resolution, proxy filings show.
A customer walks past a sign with a price of $1.25 placed on the shelves of a Dollar Tree store in Alhambra, California, December 10, 2021. The store is known for its $1 items, but due to inflation, the prices increased to $1.25.
FREDERIC J. BROWN | AFP | Getty Images
Dollar General previously told CNBC that it is “revised on a regular basis[s] and refine[s] and strengthen our safety programs[s] through training, ongoing communication, recognition and accountability.”
“When we learn of situations where we have failed to meet this commitment, we are working to address the issue in a timely manner and ensure that the company’s expectations regarding safety are clearly communicated, understood and implemented,” said a spokesperson. .
Kenny, a Dollar Tree employee, said he is only allowed to work 15 hours a week and makes about $600 a month. Due to low wages and the inability to get full-time hours, he lost his home and moved in with his parents.
“You can’t expect most working adults, not even teenagers, to make that little money, because that doesn’t help the big picture,” said Kenny, who didn’t give his last name.
Matthew Illian, director of responsible investing at United Church Funds, said Dollar Tree has no minimum wage requirement, unlike some of its peers.
Costco, Goal, Best Buy, AmazonIkea and Starbucks all have a guaranteed wage of at least $15 an hour while walmart committed to $14 per hour. However, dollar stores generally differ from many of those retailers because of their large footprint in rural communities, which tend to have a lower cost of living.
Still, in many of those locations, the dollar store is one of the few retailers in town, so there’s less competitive pressure to improve wages, safety, and even quality of goods.
Illian argued that investors benefit from income equality — pointing to a study conducted by the Economic Policy Institute that found income inequality erodes GDP by 2% to 4% a year.
“The economy in general would do better. That means more people with more money in their pocket, spending that money in more places,” Illian said. “So we’re asking Dollar Tree to look at how their offsetting practices affect a diversified investor’s returns.”
Dollar Tree declined to comment. The board of directors has called on shareholders to vote “against” the United Church Fund resolution, according to proxy filings.
— Additional reporting by CNBC’s Melissa Repko
