The Problem With Shopping at Family Dollar and Dollar Tree

8 minute read

In a time of persistent inflation, it’s hard not to like the prices at dollar stores, including the combined 35,487 locations owned across the U.S., Canada, and Mexico by Dollar General and Dollar Tree Inc., which is itself the parent company to Family Dollar and Dollar Tree. (Walmart, by contrast, has around 8,500 stores in North America.)

When I visited a Dollar Tree in Peekskill, New York recently, I was enthralled by all the things I could get for just $1.25 (the company raised prices by a quarter in December 2021—thanks a lot, inflation): a pool noodle, a pack of toothbrushes, a box of tissues, a skein of yarn.

But as with anything that’s shockingly inexpensive, you might start to feel guilty shopping at a Dollar Tree or Dollar General if you start looking at what’s happening behind the scenes at the two companies, which are battling for dominance of the discount market. Like, say, the fact that in 2021, FDA inspectors found 1,100 dead rodents “in various states of decay” in a Family Dollar distribution center in Arkansas, prompting recalls in stores across six states. Or that Dollar Tree has run aggressive anti-union campaigns in stores that have tried to organize, closing a Missouri location where workers voted to join a union and shelling out tens of thousands of dollars to convince a handful of workers at a Connecticut location to vote no in a union drive.

The Department of Labor’s Occupational Safety and Health Administration (OSHA) is so frustrated with the persistence of worker safety violations at Dollar Tree and Dollar General stores that it has started putting out press releases lambasting the stores and their seeming determination to ignore the things OSHA inspectors repeatedly tell them to do. On April 20, OSHA said that it had cited Dollar General for blocking exit routes and walkways, exposing employees to fire hazards and situations where they might be trapped and asphyxiated. The agency cited the company with one willful violation and two repeat violations, and proposed $401,000 in penalties. (OSHA proposes penalties and then the companies negotiate, usually paying less than the proposed fee.)

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It’s the latest of dozens of OSHA penalties for Dollar General and Dollar Tree in recent years—that appear not to have prompted much behavioral change. “Years of OSHA inspections that have identified systemic hazards makes it clear that Dollar General values profits more than the safety of the people who work in their stores,” OSHA regional administrator Kurt Petermeyer said, in a statement. “They are well aware of federal requirements, but they continue to ignore their legal responsibilities to protect their employees at stores throughout the nation.”

In other countries, managers and boards of directors can face criminal penalties if their companies are found to have workplace hazards, says David Michaels, who ran OSHA from 2009 to early 2017, making him the longest-serving administrator in the agency’s history. (He’s now a professor of public health at George Washington University.) No such penalties—or risk to top executives—exist in the U.S. for labor violations. To him, it’s another sign that protecting workers is a low priority to the U.S. government. Employees can rarely sue their employers for safety violations because of workers’ compensation laws that make that the exclusive remedy for resolving injuries at work.

There’s some appetite to change this in the U.S.: the Pro Act, a worker-friendly bill pushed by Democrats, would establish civil penalties for employers who violate workers’ rights, and would push some liability onto corporate officials. But it has little chance of going anywhere in a divided Congress.

Dollar General Corp. has faced more than $16 million in fines after around 200 inspections since 2017, according to OSHA. Dollar Tree has faced $13.9 million in proposed penalties since 2018, and Family Dollar has faced $5.3 million. That may seem like a lot of money to people used to shopping at dollar stores to save money, but it’s barely anything for these companies, which make billions of dollars a year. Dollar General made $11.9 billion in gross profit in 2022; Dollar Tree Inc. made $8.9 billion.

“These fines are among the highest in OSHA’s history, and they are still not having the desired impact,” says Michaels, the former OSHA administrator. “If employers can look at a fine and say, ‘that’s not going to impact us,’ they have little incentive to make a change.”

The persistence of labor violations at dollar stores indicates that though minimum wage increases across the country have made low-wage jobs better by many measures, some of America’s 15 million retail jobs are still dangerous for workers.

Looking at both Dollar Tree and Dollar General over the course of five years, inspectors found boxes stacked dangerously and blocking exits, water leaking through the ceiling and causing wet floors covered in ceiling tiles, and boxes blocking fire extinguishers and electrical panels. There’s also evidence that the companies don’t end up paying anything close to the proposed penalties. According to a document OSHA provided to TIME, Dollar General received $16 million in initial penalties since 2017 but has only paid $3.9 million so far and owes a balance of $631,666. Dollar Tree has received $13.9 million in penalties and paid $9 million, with a balance due of $120,000.

OSHA did not respond to follow-up questions as to why the companies have paid only a fraction of the proposed fees; Michaels says that companies can contest the violations and do not pay fines until the case is closed. OSHA can also lower fines to get a faster settlement.

The companies “know the penalties for these violations are minor—they figure it’s just the cost of doing business,” says Kate Bronfenbrenner, a professor at Cornell’s School of Industrial and Labor Relations.

Dollar Tree said, in a statement to TIME, that “any issues identified by OSHA are taken very seriously and remediated quickly and thoroughly” and that the company focuses on maintaining a safe environment for workers and customers. Dollar General said much the same: “When we learn of situations where we have failed to live up to this commitment, we work to timely address the issue and ensure that the company’s expectations regarding safety are clearly communicated, understood and implemented.”

But in some ways, the business model of dollar stores makes it difficult to comply with OSHA regulations. Stores are relatively small, compared to a Walmart or Target, and are low on both storage space and workers to save money. When new goods come in, there’s nowhere to put them and no one to unpack them, leading to tall stacks that endanger workers. In October 2022, OSHA added Dollar General to a “severe violator” watchlist for companies that willfully or repeatedly violate safety standards. Since 2017, Dollar General has had 130 repeat violations, meaning that inspectors found a problem, flagged it, and then found it again; Dollar Tree has had 131.

Repeated violations at dollar stores was a problem when Michaels was OSHA administrator, and it’s still a problem, he says, because the penalties for violating the law are such a small piece of large companies’ profits. Executives at one company once told Michaels that it was cheaper to have an OSHA inspector come and issue fines for violations than it was to actually hire an industrial consultant to help the company follow the law. OSHA’s maximum penalties for serious violations is $15,6252, and the maximum penalty for willful or repeated violations is $156,259.

The Labor Department may be trying to force the companies to take action by publicly shaming them, since the penalties aren’t motivating behavioral change. It is issuing frequent press releases every time it finds violations at Dollar General, Dollar Tree, and Family Dollar—Duke economist a few years ago found that one government press release achieves as much compliance as 210 inspections, since companies are so conscious about their public image. One prominent example: the fossil fuel multinational BP didn’t appear to care very much about OSHA inspections, Michaels says, until the bad press after the 2010 Deepwater Horizon BP oil spill—after the deaths caused and the huge fines, he says, the company adopted much better safety programs.

Still, the national dollar-store chains appear willing to absorb these fines as long as it means they can keep operating as they have been. And if they keep growing and the fines stay relatively low, there’s little advantage to changing. In an economy where goods keep getting more expensive, the dollar tree stores are an appealing option for consumers, despite their labor violations. Dollar Tree said, in its most recent annual report, that it thought the market could support about 10,000 more stores across the U.S. and Canada. Dollar General opened its first store in Mexico this year. It hopes to have 20 stores in northern Mexico by the end of the year.

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