Health Care on the Line

Picket lines that could appear at 859 Southern California grocery stores as early as this morning would cast a shadow well beyond the grocery industry. The troubling question is who will pay for costly health-care coverage.

Management argues that grocery chains no longer can afford to pick up the whole tab because they are being undercut by nonunion grocers that pay considerably lower wages. The nonunion companies also offer health-care benefits that often go unused because employees can’t afford to pay the high premiums. The 70,000-member United Food and Commercial Workers union understandably loathes the idea of surrendering benefits gained in past negotiations and strikes.

The union stance echoes the old hard line of the United Auto Workers, which for decades extracted a model contract from the weakest carmaker that it used to wring concessions from the other Big Three manufacturers. But those days are gone. The UAW last month safeguarded worker and retiree health-care benefits by agreeing to almost no pay increases during a four-year contract and giving General Motors, Ford and DaimlerChrysler the right to cut costs by closing factories.

Even union cooperation on wages and plant closings might not be enough to keep the Big Three from morphing into the Big Two within a decade as overseas manufacturers use lower production costs to steal market share.

The question facing grocers and their workers is whether they will be able to craft a solution that acknowledges dramatic changes in the way people buy groceries. Warehouse-style stores are expanding, and Wal-Mart, the nation’s largest retailer, plans to open huge supercenters, retail stores with complete grocery sections, in California.

Though they haven’t singled out Wal-Mart, grocery chains blame their competitive problems on nonunion employers that cut labor costs by failing to provide affordable health-care benefits.

The continued erosion of employer-sponsored health plans was the major reason the number of Americans without health insurance shot up by 2.4 million people last year to 43.6 million. It won’t be solved by legislative fiat, like the ill-considered employer health benefit requirements in a recently passed California law, SB 2. The larger problem also won’t be cured in labor negotiations, given the increasing gulf between companies’ need to compete and workers’ hard-won benefits.

Congress continues to avoid the larger health-care issue like the plague, but in the long run only federal action can ensure U.S. workers and their families that the charity clinic won’t be their only medical alternative.