Strike cost outweighs gains for most grocery workers

By: EDMOND JACOBY - Staff Writer | Saturday, March 6, 2004 8:12 PM PST ∞

NORTH COUNTY ---- A comparison of the settlement ratified by the members of the United Food and Commercial Workers International Union on Feb. 29 with the offer put forward by Vons, Ralphs and Albertson's on Sept. 3, more than five weeks before the strike and lockout began, clearly shows that while both sides lost income, the union members lost much more than they will earn back under their new contract.

Based on estimates of daily losses by analysts during the strike, and on financial data released by the companies themselves, it appears that the labor dispute's final cost in lost revenues to the stores was about $3.7 billion.

That is a huge number of dollars, and probably would have forced the stores to surrender if they had been local chains, as both Vons and Ralphs once were, instead of operating divisions of national corporations.

But their sheer size ---- each one earns every year several tens of times what was lost in California during the strike ---- insulated them against the pain the union was trying to inflict. Surely they could not have held out indefinitely, but they certainly could hold out much longer than their employees, and the union's leadership ought to have been able to figure that out.

It was not the chains alone that lost money during the strike and lockout, however. The employees, too, paid a heavy price.

On the basis of the union's description of its members as working an average of 30 hours per week for an average pay of about $14 per hour, they must have lost about $524 million during the 21-weeks-and-a-day between the walkout Oct. 11 and the ratification of the new contract last weekend. Some of that, possibly as much as $200 million, was offset with strike pay, but even taking strike pay into account the average worker lost an astonishing $6,000 of personal income.

So, what did the workers get for their money? The union says the workers' "sacrifices were not in vain." Statements like that show up on the Web sites of the union locals in Southern California.

Calling its members "heroes of America's threatened middle class," Local 324 in neighboring Orange County told them "the contract that we finally achieved protects our health care and our pensions."

"We forced the companies to be reasonable in many other areas as well," Local 324 said.

But did they?

The health benefit plan they finally agreed to is nearly identical, feature for feature, to the plan proposed by the grocery companies Sept. 3.

The office visit co-pays are the same; the out-of-pocket limits are the same; the limits for chiropractic care, chemical dependency treatment, mental health care, vision and dental care: They're all the same.

The only difference is the requirement that the employees pay premiums for their coverage, estimated by the companies to be $5 for individual coverage and $15 for family coverage. The premiums would have been required immediately under the Sept. 3 proposal, and the ratified settlement postpones that for 24 months.

If all of the employees who went on strike or were locked out had instead begun paying the premiums, and if they all had continued to be employees for two years, they would have paid $61.4 million in premiums by the end of 24 months.

Subtracting the premiums and the strike pay from their lost wages still leaves $242.6 million unrecovered. That's about $4,100 from each grocery worker's wallet.

Something like $30 million to $35 million of that was lost by grocery store employees in North County; and while borrowing from friends, banks and relatives plus an upsurge in credit card debt offset some of that lost income, the rest of it simply disappeared from the local economy.

In the wake of most strikes that last awhile, returning workers are fewer in number than those who were on the payroll before things got testy.

The same is true of the grocery workers, and Ralphs is having difficulty staffing from its returning UFCW members.

Some Ralphs stores expect to continue operating with one or more service departments shut down until they can move staff around to fill the positions, but one of the features of the new contract that the chains succeeded in forcing the union to accept stands in the way of that.

The returning workers have begun to believe that the new two-tier employee structure would turn a promotion into a pay and benefit cut.

The two-tier system will pay lower wages to people hired after the contract was ratified than to employees who already worked for the supermarket before the strike and lockout began, even if they are doing the same work. It also requires these new employees to remain longer in a job to qualify for a pay raise, and it severely limits what their employer will contribute to their health and pension schemes after the first two years of the contract, increasing the employee cost of those benefits.

In the view of the returning workers, accepting a promotion or a new assignment would make them "new hires" in their new position, automatically moving them into the second tier, where the pay is lower and the benefits are less. While their pay probably would not actually drop, they could find themselves facing a much longer wait for their next raise, and they could be confronted with health benefit limitations down the road.

With that understanding comes a reluctance to fill vacancies that developed in service departments such as delicatessen and seafood, and even in the meat department. So workers who lost thousands of dollars by striking or being locked out now are locking themselves out of career moves they might have relied upon to earn back some of their lost wages for fear that it will just compound their losses.

Ask any of them: This is not the way it was supposed to be.

Contact staff writer Edmond Jacoby at (760) 739-6675 or ejacoby@nctimes.com.