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At stake in the Southern California grocery strike
Taking a stand for health care

November 7, 2003 | Pages 6 and 7

THE BIG grocery strikes in Southern California and the Midwest have put a spotlight on the rapidly worsening health care crisis in the U.S.--and the efforts of employers to push rising costs onto workers. "The tens of thousands of workers who are on strike in California, West Virginia and elsewhere for quality, affordable health care are taking a stand for all American working families who are being squeezed beyond their limits by our broken and inadequate health care system," AFL-CIO President John Sweeney said October 15.

Two weeks later, Sweeney joined top union leaders to announce a multi-union fund to help the United Food and Commercial Workers (UFCW) pay $10 million a week in strike benefits. Besides the 70,000 grocery workers on the picket line in Southern California, another 3,300 are on strike in a Kroger chain based in West Virginia. And 10,000 grocery workers returned to work in St. Louis October 31 after a month-long strike. In each case, health care emerged as the key issue. LEE SUSTAR looks at organized labor's battle in the grocery industry--and the stakes for all U.S. workers.

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JUST 8 percent of employees have family health insurance paid by their employers. And if the nation's three biggest grocery chains have their way, that figure will soon drop even further.

The grocery industry's Big Three--Albertsons, Kroger and Safeway--are trying to break the power of the UFCW in Southern California by forcing workers to pay health care premiums for the first time. The employers have made several other harsh demands as well: a lower pay scale for new hires, unlimited subcontracting and greater management discretion over workers' hours, to name a few.

But health care benefits--the reason that most long-term workers remain in the low-paying grocery industry--is by far the biggest issue. Both labor and management agree that Safeway CEO Steven Burd is the driving force behind the grocery companies' anti-union offensive.

A year ago, Safeway pushed the UFCW to the brink of a strike at the company's Dominick's chain in Chicago by threatening to close the stores unless the union agreed to concessions as part of a sale to new owners--a standoff that continues today. Burd and other industry leaders claim that they need these givebacks to compete with nonunion Wal-Mart--which forces its workers to pay between 41 and 47 percent of health care costs, according to a study by the AFL-CIO.

Yet although Wal-Mart has now surpassed Kroger as the top grocery retailer nationwide, its share of the grocery market in Southern California is estimated at just 1 percent. The grocery chains' parent companies are profitable. Their combined operating profits rose from $5.1 billion in 1998 to $9.7 billion last year.

In fact, the employers' real aim is to break the unionized grocery industry tradition of providing adequate health insurance. Safeway's Vons and Pavilion stores, along with Albertsons and Kroger's Ralphs chain, currently pay the entire health insurance premium for workers and their dependents.

By contrast, the typical employee saw family health insurance premiums rise 50 percent over the past three years, to $2,412, the Kaiser Family Foundation reported. Then there are co-pays and deductibles. Average annual out-of-pocket health care costs for employees at large companies have doubled since 1998 to an average of $2,126, according to Hewitt Associates, a benefits consulting company.

Furthermore, nearly one in three of the 44 million people without health insurance in the U.S. today now work for companies that employ 500 workers or more, according the Commonwealth Fund.

If the grocery employers prevail in Southern California, thousands more workers could soon be priced out of health insurance. In an effort to avoid a strike, the UFCW offered a deal in which employees would pay deductibles and higher co-pays.

The employers countered with an offer that would act as a time bomb--eventually forcing cuts in coverage by underfunding the plan. The employers claim that their offer is generous, since they would increase health care benefits paid per hour from $4.04 today to $5.38 at the end of a three-year contract.

Sounds like a big boost--but there's catch. New hires, who tend to be young and without children, would be placed in a separate plan, with employer payments capped at $1.35 an hour per worker.

This would limit coverage and reduce the overall funding for the current workers' plan. In the past, the employers paid varying amounts for health care benefits according to the costs. With a definite cap on benefits--even if the cap increases--workers would be stuck if rising health care costs overrun their coverage.

Sidney Abrams, who heads the health care benefits committee for the California Public Employees' Retirement System, estimated that the proposed benefits caps would force workers to pay as much as $95 a week for health insurance at the end of a three-year contract--far in excess of the $5 to $15 figure that the company has claimed.

Workers would have to absorb up to $1 billion in health care costs, the union estimates. "The employers were looking for changes that were just insane," said Abrams, who serves as a consultant for the UFCW. "This offer would destroy the health care plan in a short number of years."

And the more low-wage workers lack medical coverage, the greater the social cost, according to Gary Payinda, an emergency room doctor at Los Angeles County-USC Hospital and Luisa Blue, president of the Service Employees International Union Nurse Alliance. "When the supermarket workers proclaim that 'enough is enough,' they are drawing a line not just for themselves but for all of us," they wrote in the Los Angeles Times. "They are saying that instead of a race to the bottom--taking away health care from those who have it--we need to provide affordable care to everyone."

How can the union win?

THE SOUTHERN California grocery strike began October 11 with an outpouring of popular support. The question remains, however, whether union leaders are willing to press ahead with the kind of action that's needed to win.

On October 31, the UFCW announced that it was pulling pickets from Ralphs stores and dispatching workers to picket at Vons, Pavilion and Albertsons instead. According to Ellen Anreder, a public relations specialist hired by the UFCW, the pickets were removed as a "gesture of gratitude to the general public."

She told Socialist Worker that the decision was made because LA in particular was hit by what she called a "horrible" transit strike--in addition to the grocery walkout and wildfires. The result is that management's scabbing operation at Ralphs gets a free pass--even though management locked out the union.

Rather than retreat, the union should be focusing anger on Ralphs--and building on its widespread support. After workers walked out at Safeway's Vons and Pavilion stores, managers at Albertsons and Ralphs immediately locked out the UFCW, putting five union locals on the picket line from the Mexican border through San Diego to the LA area. Picket lines were everywhere. Drivers honked and yelled support, and delegations from other unions stopped by with refreshments.

The walkout by bus mechanics at LA's Metropolitan Transportation Authority a day later put labor action at the center of everyday life in the city. Contract rallies by United Teachers Los Angeles October 24 highlighted solidarity with the strikers.

The atmosphere recalled the 1997 Teamsters strike at United Parcel Service strike, when millions of people identified with part-time workers' fight for decent full-time jobs. Top UFCW officials told reporters that they were considering spreading the pickets to Safeway-owned stores across the U.S.

In LA, UFCW pickets shut down two grocery warehouses when Teamsters refused to cross the line. Strikers talked of plans to picket at all such facilities, which would have effectively shut down the stores.

But on October 24, the UFCW suddenly ordered an end to those picket lines, citing a "financial burden" on the Teamsters. Teamsters drivers, moreover, have continued to deliver goods to strikebound stores by turning over their keys to managers.

And if the UFCW was willing to give a break to Ralphs, the stores' parent company, Kroger, took a very different approach the next day in another UFCW strike in West Virginia, walking out of negotiations over a walkout of 3,300 workers that began October 9. Another 4,000 Kroger workers were voting November 3 on a possible strike in Indianapolis following a contract extension--with health care once again the central issue.

Elsewhere, however, UFCW leaders have swallowed such demands without a fight. Leaders of the big Local 955 in Michigan in September agreed to a four-year deal with the Meijer chain that will force full-time workers to pay 40 percent of family health insurance costs as well as higher co-pays and prescription drug charges.

But in St. Louis, 10,000 members of UFCW Local 655 won a nearly month-long strike against three store chains after members voted down a deal recommended by union leaders. While the contract raised some health care costs for retirees, the strike forced the employers to drop their demand that workers pay for premiums.

If the UFCW actions in the face of this corporate onslaught appear uncoordinated and contradictory, it's a reflection of longstanding problems in the union. In a labor movement rife with inflated salaries and bloated bureaucracies, the 1.3 million-member UFCW is among the worst on both counts.

It is the product of mergers of several different unions--and since its creation in 1979, it has been known for its willingness to bargain away members' wages and benefits. The most extreme example was the mid-1980s meatpackers' strike of Local P-9 at the Hormel plant in Austin, Minn.

Then, the UFCW campaigned across the labor movement for unions not to support the walkout--and ultimately took over the union local to force a rotten contract agreement. The end result was that wages in the meatpacking industry were dramatically slashed--and the union is in the midst of a months-long strike at a Tyson plant in Wisconsin to try to keep standards from slipping further.

The two top UFCW officials in the 1980s were later ousted in corruption scandals. According to the UFCW reform group Research-Education-Advocacy-People (REAP), corruption remains a major problem in the union.

Moreover, Wal-Mart, the nation's largest private employer, has so far steamrollered the UFCW's scattered efforts to organize its stores. All this has led grocery store employers to believe that they can gang up on the UFCW and tear it apart.

But as the UFCW victory in St. Louis showed, rank-and-file workers are capable of pressuring union leaders into taking a stand, even when they're reluctant to do so. The strikes in Southern California, West Virginia and elsewhere have the same potential. By tapping the widespread anger over the U.S. health care crisis, workers can rally the support that they need to win--for all of us.

Grocery strikers speak out

DAN VAUGHN has worked at Ralphs for 27 years, currently as a cashier at the Third and LaBrea store in Los Angeles. He is a shop steward and picket captain in UFCW Local 770.

WAL-MART is only 1 percent of our business in Los Angeles. So it's a fallacy to think that they are a threat. This is about health benefits--and the big chains want more money.

They want to give us 50 percent of [health care coverage] of what we had a year ago. And in addition to that, they want to charge us--they say $15 for single people and $25 for people with families [per week]. But we also know that that's not accurate. It's substantially more than that--like $65 or $90.

It would dramatically change per year--it would increase. Health care is one of the main draws for the job. Otherwise, the job doesn't look as good to my family and me--my daughter and myself mainly. I help out with my grandparents and my mom. Also, they want to subcontract out, so that [vendors] would stock the shelves. Potential hours that we have now would be reduced by half.

I'm not going to sign that contract. I can't work under those conditions--seeing as we have the ability not to do it. This is not what I signed up for. The economy being what it is, I understand that there are some changes. But changes this drastic--that's a little ridiculous, to put it mildly.

I'm not really happy about the strike situation, but it's necessary that we prevail, because if we don't, it will be a domino effect on the other unions in this town. The other unions would definitely fall. So it's important.

Other unions--teachers, firemen, police officers, construction people, the [Hollywood unions]--have been coming to show their support. They're giving us water; they're giving us ice. Because if we don't prevail, they won't prevail.

ROGELIO BARBOZA is an immigrant from Peru who has worked at Ralphs for seven years.

IT'S ABOUT the benefits--for my wife, two kids and me. They want to cut everything. They want to cut benefits, they want to cut pensions. We don't want more money. We want to keep the benefits.

We have a lot of customers who support us. If you check here, there are many spots in the parking lot. I don't care if it's hot. I don't care it's cold. We stay here in support of the union.

MARIA VALERA, who is also originally from Peru, has worked at the Third and LaBrea Ralphs for 11 years.

WE ARE on strike because [health care] is the most important thing that we have. I'm a part-time worker. Myself and my husband have two kids, and they need health care.

This company is making a lot of money, and they say that they can't afford health care. Why? We work for it. We deserve the health care. We're not fighting for increased wages.

I make $12 an hour. I'm a part-time worker. I work 26-28 hours a week. I have another job. This is the one that pays the health care.

We work really hard in this company. It's not an easy job. We have to be really careful with every customer. It's a lot of stress. We work six or 8 hours. We are supposed to smile all day long, no matter how hard it is.

Now, the company just wants to cover the doctor visits. They don't want to cover dental. They don't want to cover vision. They say that if we have cancer, they won't cover chemotherapy--you have to pay for all of it.

Even though everything is going up, we have the same salary. The people who are making $17 an hour are cashiers who have been working for 18 years--and they're still-part time workers. In this store, three cashiers are full-time workers. That's it. This is out of 150 employees--only 26 full-time workers.

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