Georgia Senator David Perdue claims in his official biography that while serving as CEO of Dollar General from 2003 to 2007, he “created thousands of quality jobs and helped working families get from payday to payday”.
During that time, Dollar General opened over 100 new stores in Georgia for a total of 464 in the state. While Perdue earned over $ 50 million in total compensation from the company, the employees who held these supposedly high-quality jobs initiated several lawsuits alleging that Perdue’s generous executive compensation was the product of wage theft and systemic exploitation.
▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄ ▄
Under Perdue’s leadership, no fewer than four class action lawsuits – eventually merged into one – have been filed against the company for wage theft alleging systematic misclassification of managers to deny them overtime pay. The company’s business model was based on exploiting a loophole in the overtime regulations. If an employee could be classified as a “manager,” the company could force them to work 60 or 80 hours a week but not pay them overtime or additional wages.
The company’s annual reports while Perdue was in charge stressed that Dollar General had “a lean staffing of typically two to three people in the store at any one time” and stressed that “changes to minimum wage laws” are affecting the company’s bottom line could. The company also warned that “a significant portion of our workforce would unionize or attempt to unionize” would affect profits.
Dollar General paid $ 8.4 million in 2014 to settle allegations that it withheld overtime pay from its managers, who were infrequent managerial roles and instead kept the normal functions of running a Dollar General store 60 to 90 hours a week. The lawsuit was brought under Purdue’s watch in 2006. Dollar General also paid $ 18.7 million that year for gender wage discrimination for violations that also occurred under Perdue’s watch.
In his successful 2014 campaign for the US Senate, Perdue showed that his own views mirrored those outlined in Dollar General’s financial statements. “As I said, if you increase the minimum wage, you will destroy jobs in this country,” said Perdue in a debate with his democratic opponent.
The Senate Republican majority has steadfastly refused to accept a possible increase in the minimum wage. The Democratic-controlled House of Representatives passed a minimum wage increase that would raise wages from the current $ 7.25 to $ 15 by 2024, for which all but six Democrats and all but three Republicans voted against.
The two Senate races in Georgia, which will hold a runoff election on Jan. 5, will determine both control of the Senate and the likelihood of an increase in the minimum wage that is virtually guaranteed if the Democrats win control of the Senate. Data from the National Employment Law Project shows that 45.3 percent of Georgians earn less than $ 15 an hour.
“The convergence of low wages and rising cost of living has already been a problem, and the pandemic has made it worse for retail workers,” said Valerie Barnhart, a 1996 spokeswoman for United Food and Commercial Workers Local, which represents retail workers in the south. “We have to ensure that the minimum wage in Georgia is raised to at least $ 15. That won’t happen at the state level because of the Georgia General Assembly. That’s why these Senate races are so important, because it’s the only way Georgia workers can get a raise. “
“The economy is creating more and more of our core customers,” announced Perdue’s successor as Dollar General CEO Todd Vasos in a 2017 earnings conference call on Wall Street. Vasos was referring to the fact that rising poverty meant more buyers in dollars in general. Rising poverty means not only that buyers are more likely to look for the lowest prices, but also that the number of reliable car owners is falling, forcing people to look for what is right in their city or neighborhood – a dollar- Load.
A similar dynamic continued under Perdue’s watch at Dollar General. Nationwide, Perdue monitored Dollar General’s growth from 6,273 stores to 8,260. A Harvard Business School case study, conducted in collaboration with Perdue in 2007, attributed the explosive growth to two factors: “the new bargain mentality of American consumers” and “the increasing proportion of US households in the lower income brackets and / or Fixed Income “. . “
“It was pretty clear that these deals would do well in economic downturns,” said Jerry Shannon, assistant professor of geography at the University of Georgia who has researched the impact of dollar deals. Dollar stores grew, Shannon said, as “the decline in small independent retailers in the wake of the recession and the increasing consolidation of retail options by Walmart or other large supermarket chains and the increasing number of households facing a precarious economy.” in the course of the recession. “
Perdue took over the helm of Dollar General after the 2001 dot-com recession and took advantage of the higher levels of poverty by spurring expansion. Perdue’s work peaked when the company was bought in 2007 by a consortium of private equity firms and banks led by KKR. Perdue received a payout of $ 42 million; $ 9.5 million of that payout was a severance pay agreement triggered by a change of ownership – a change of ownership facilitated by Perdue, according to filings with the Securities and Exchange Commission.
Photo: Justin Sullivan / Getty Images
Perdue took over the helm from Dollar General shortly after his first cousin, Sonny Perdue, became governor of Georgia. Sonny Perdue is now the outgoing Agriculture Secretary under President Donald Trump. The public policy that Perdue followed as governor brought Dollar General more and more customers.
As governor, Perdue has repeatedly cut funding for public education – $ 1 billion annually under the established formula. A 2016 study by the Quarterly Journal of Economics found that higher government spending on education resulted in higher wages and lower poverty in the neighborhoods that received the additional funding.
“Dollar stores have gone crazy, targeting small towns, rural areas, and low-income neighborhoods, especially African American ones,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, which promotes sustainable local economies . “Dollar stores feed more Americans than Whole Foods Market, and we’ve learned that they’re not just a symptom of poverty, they’re a cause of it.”
One central way that dollar stores create poverty is by undermining locally owned independent grocery stores that sell products. “Dollar stores will come in and set up across from an independent grocer,” said Mitchell. “They are selling key items at very low prices at a loss. As a grocer, you don’t earn a lot from fresh food, but from packaged items. If you lose that profit margin, you go into the red. You keep seeing dollar stores come in and existing grocery stores shut down, ”said Mitchell.
“Dollar stores feed more Americans than Whole Foods Market, and we’ve learned that they’re not just a symptom of poverty, they’re a cause of it.”
Given the impact of Dollar General on local business ecosystems, some communities in the state have hit the pause button. DeKalb County has announced a moratorium on new dollar stores in unincorporated areas, as has the city of Stonecrest. DeKalb County Commissioner Lorraine Cochran-Johnson has sought a moratorium on new dollar stores in the county, saying the move was due to complaints from their constituents. “One person said to me, ‘I hope you understand that dollar deals are not an economic development in our communities. They do far more harm than good, ‘”recalls Cochran-Johnson. “What you will find is when there is a massive presence of dollar stores where you tend to see food deserts and the greatest differences in health.”
Mitchell also pointed out the low wages paid by dollar stores. “Dollar stores have very low wages and a history of wage and time lawsuits and [Occupational Safety and Health Administration] Human rights violations and the history of violence in which many employees have lost their lives. The quality of these jobs is pretty bad. Even the so-called managers are paid very low salaries for their working hours. “
David Perdue’s use of low wages as a business tactic didn’t stop with Dollar General. The Atlanta Journal-Constitution reported in 2017 that a 78-year-old freight forwarding company, which was acquired by David and Sonny Perdue in 2012, appeared to have failed because of “poor management, which manifested itself in low wages and aging equipment while the industry was on the move enjoyed two successful years. “
A spokesman for David Perdue defended his role as CEO. “As CEO of Dollar General, David Perdue led a turnaround – he expanded his presence to over 8,500 stores across the country and created thousands of quality American jobs. Perdue worked his way through college, creating tens of thousands of jobs over the course of his career – he worked hard and earned what he got, ”accusing Perdue’s opponent Jon Ossoff of being a“ privileged liberal ”.
The January elections are likely to be extremely competitive and expensive. The two Democratic candidates, Ossoff and Rev. Raphael Warnock, have pledged to support an increase in the minimum wage in the Senate. Perdue’s Vice President Kelly Loeffler has no public position on raising the minimum wage.