UFCW Sacrifices Workers While Declaring Victory
Just as those videos of old hotels and tenements imploding never fail to enthrall when they appear on the evening news, the spectacle of a great institution crumbling away exercises a ghastly fascination: One moment an edifice stands solid and proud; a few seconds pass, and nothing remains but a cloud of dust.
But there’s a difference between the controlled demolition of a decrepit housing project and the collapse of, say, the United Food and Commercial Workers, which resolved its long-running battle with three Southern California grocery companies last week. In the former case, the authorities take pains to keep innocent bystanders safely out of danger. In the latter, the livelihoods of thousands of people could wind up buried in the wreckage.
Union officials are insisting that the contract ratified last weekend represents a great victory. UFCW International President Douglas Dority, who hustled himself into retirement Tuesday, issued a statement over the weekend calling the Southern California job action “one of the most successful strikes in history.”
Stirring words indeed. But as an accurate description of events, they rank right up there with “Dewey Defeats Truman.”
The obvious question to ask in the wake of the strike and lockout that affected 59,000 supermarket employees is whether it was worth the suffering.
After more than four months on the picket lines, the workers ended up with a deal that is certainly inferior to their previous contract, and in some respects inferior to the contract proposal they rejected just before the strike.
The final accord lacks an hourly pay increase that was in the original proposal, and establishes a whole category of second-class employees whose pay will be scarcely sufficient to raise a family on. (The top hourly rate of $15.10 for newly hired clerks, reachable after five years of work at an average 30 hours a week, will amount to $23,556 a year.)
This two-tier setup materially weakens the union itself. Its membership will evolve from a group of decently paid workers into a group of poorly paid ones. Its resources to fight the employers will dwindle, and its prospects for growth will vanish.
Union officials defend this outcome by accepting, in effect, the supermarkets’ position that they needed to cut labor costs to compete with Wal-Mart Stores Inc. and other cut-price grocers. “It’s not in our best interest to turn our companies into dinosaurs,” says Steven Stemerman, the chief union negotiator.
That’s a major climb-down for the UFCW. From the beginning of this dispute the union argued that the employers’ pleas of competitive disadvantage were wildly overstated; now that they’re buying into it, where will they hold the line on the supermarkets’ demands?
The damage done by this dispute to the principle of providing a living wage and adequate healthcare coverage for employees will be felt by workers -- union and nonunion -- around the state and across the country. First to face the music will be the 50,000 Northern California supermarket employees whose contracts expire in July and September.
Among those who gained from this ugly fight are the supermarket executives who provoked it. Their initial proposal for a contract that they knew the workers would reject made a strike inevitable, and their intransigence in negotiations needlessly prolonged it.
It will be instructive to see whether they pass their lower labor costs on to customers. Will shoppers see huge price breaks at Vons to keep them from driving out to a Wal-Mart in Chino? Outside of a few weeks of discounts to lure shoppers back into their neighborhood stores, I wouldn’t bet on it. We’re much more likely to see the companies boast fatter profit margins and pay fatter bonuses to the executives who steered these companies through the white water of a union-busting campaign. Or maybe we’ll see fatter dividends for shareholders -- or, in the case of Ralphs’ parent Kroger Co. and Vons’ parent Safeway Inc., which haven’t been paying dividends lately, the restoration of a payout.
In contrast, consider what the union lost.
Plainly, the most discouraging provision of the new contract is the two-tier wage and benefit scale, differentiating between existing workers and new hires. This was vehemently opposed by the union, obviously to no avail.
The idea behind the two-tier plan -- a popular divide-and-conquer management strategy in many industries 20 years ago -- is to persuade existing employees to sell out their future co-workers by loading pay and benefit cuts mostly onto new hires. Many companies, finding the system to be a morale-killer, have eventually returned to unified pay scales. But the supermarket industry is evidently prepared to live with surly, discontented work teams at war with each other.
With new workers receiving lower pay, fewer holidays, less vacation and inferior health and pension benefits, managers will have a huge incentive to drive older, more expensive employees off the payroll and replace them from the bargain bin.
They’ll have plenty of tools to do so. They can manipulate working hours or transfer employees arbitrarily to stores in inconvenient locations; if you’re a senior employee living in Pasadena, think about the commute to Huntington Beach.
Rumors already are percolating among Vons and Albertsons Inc. employees that their bosses are under orders to apply work rules rigorously, writing them up for reporting to work a few minutes late and so on. “This is a potentially explosive situation,” says Ruth Milkman, a labor relations expert at UCLA. “You can ride anyone out of a job if you’re mean enough.”
Then there’s the healthcare plan. The pact allows the employers to cap their monthly contributions to the plan; in the last contract, the contribution was adjusted each month to cover the cost of claims. The change shifts the risks from increasing healthcare costs onto the employees; if the cost of their benefits outstrips the company contributions, their benefits will have to be cut or their out-of-pocket fees will rise.
The union contends that the contribution formula will be adequate. “I’m beyond highly confident that we have negotiated more than enough money to maintain the benefits,” Stemerman told me. He notes that the new contract defers for at least two years the requirement that existing workers pay part of the monthly premium for their healthcare.
Stemerman also says the final contract requires a higher contribution to the healthcare fund than the employers originally offered.
But buried in the details is a sort of shell game, the result of which is that union employees are likely to be worse off in the future as their medical claims outstrip their resources.
In the end, supermarket union leaders say they’ve learned a lot from what happened during the strike -- including the folly of waging a regional campaign against the giant grocery chains, as opposed to a truly national effort.
“Watch what we do in Northern California,” Stemerman says. “You can bet we’ll do things differently.”
To the Southern California union members who sacrificed themselves to serve their leaders’ learning curve, that must be a comforting thought.
Golden State appears every Monday and Thursday. You can reach Michael Hiltzik at firstname.lastname@example.org and read his previous columns at latimes.com/hiltzik.
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