Ralphs’ Chief Endorses Hike in Minimum Wage

A battalion of Los Angeles-area community activists pushing to increase California’s minimum wage from $3.35 to $5.01 an hour scored what they termed a “major victory “ Saturday when an executive of a major supermarket chain endorsed a “substantial increase” in salaries for low-wage earners.

Byron Allumbaugh, chief executive officer of Ralphs grocery store chain, also agreed to urge the California Retailers Assn. to “review their position” on the minimum wage. Allumbaugh is president of the group, comprised of the state’s largest grocery and department stores, which has lobbied against any increase in the minimum wage.

Allumbaugh’s change of heart was announced Saturday morning as more than 300 members of three grass-roots groups--the United Neighborhoods Organization, the South-Central Organizing Committee and the East Valleys Organization--converged on a Ralphs store at 3rd Street and Vermont Avenue.

Plan Disruptions

The demonstrators were planning to picket, mill through the store and wreak havoc at check stands by making purchases with thousands of pennies.

But Ralphs’ new position turned the demonstration into a victory rally. “We’re with you,” Jan Charles Gray, Ralphs senior vice president, told the cheering crowd.

Plans for a demonstration preempted, the group exercised a contingency plan, marching three blocks to a Denny’s restaurant. There they informed the manager that Don Pierce, president of Denny’s Inc. and a prominent member of the California Restaurant Assn., had replaced Allumbaugh as the group’s “prime enemy” in their campaign for a “moral minimum wage.”

Allumbaugh’s statement--read by Gray at Saturday’s rally--was forged at a meeting Friday between Ralphs’ executives and representatives of the three groups. Allumbaugh agreed to the meeting after the groups targeted him last week as one of their “major enemies” because of his role with the California Retailers Assn.

‘He Caved In’

Rather than face the disruption and adverse publicity, “he caved in,” said Larry McNeil, the lead organizer of the East Valleys Organization.

But Gray, who joined Allumbaugh in the Friday negotiations, said it was less a matter of pressure than the realization that “the minimum wage is not relevant to our industry.” Ralphs’ lowest pay, he said, is $4.25 for teen-age clerk helpers, and the average hourly rate for unionized workers throughout the firm’s stores and warehouses is $11.50.

“We felt there were good business reasons to do it,” Gray said. “We had never formulated a company position on this before. . . . Mr. Allumbaugh just happened to be president of the retailers association.”

Activists acknowledge that they may have a much tougher time persuading Pierce of Denny’s to change his position, because the restaurant industry, unlike major grocers, has a large number of minimum-wage employees.

Seen as ‘Soft Enemy’

Allumbaugh had been targeted in part because activists perceived him as a “soft enemy.” Father John Seymour, a Catholic priest with the South-Central Organizing Committee, told demonstrators that Ralphs’ new position shows that “only a narrow, self-serving and small-minded segment of California business” opposes a major increase in the minimum wage.

The goal, activists said, is to break up a formidable lobbying effort against an increase in the minimum wage that includes retail, restaurant, hotel, theater and garment industries. The state Industrial Welfare Commission is expected on Dec. 20 to decide whether, and how much, to increase the wage standard.

The figure of $5.01 sought by the activists is based on research by the commission’s staff that indicates that the near-50% hike would be necessary to lift minimum-wage workers to the standard of living they had in 1967.

Although Allumbaugh refused to define by number what he meant by “substantial increase,” the activists said it was a clear victory. “A former enemy has converted,” one said.