July 23, 2007
What Follows the SoCal Labor Deal?
With the strike/lockout of 2003/04 still fresh in their memories, members of the United Food and Commercial Workers (UFCW) union in southern California seemed ready to vote in favor of a new agreement that would keep them on the job with a contract that they and their employers (Albertsons, Ralphs and Vons) can live with.
The new deal, which covers 65,000 workers in 785 stores, was endorsed by the union’s leadership and appeared to have widespread support from members, as well.
“I voted for it – hands down,” Armando Avila, a clerk in the frozen food section of a Vons store in Mission Hills, told the Los Angeles Times. “On our last contract, we got beat up pretty bad and now we’re getting some of that back.”
Terms of the new deal included a shortened wait-time for workers to be eligible for health insurance. Under the terms of the last contract, new hires would have to wait 12 months before being eligible while dependent children would have to wait 30 months. The new deal shortens the waiting period to six-months for both workers and their children.
The new deal also eliminates the two-tier system of wages and benefits for workers.
Warren Duplessis, a supervisor at a Vons store, said getting rid of the two-tier system will benefit employers as well as workers. “It was causing a lot of division between new hires and other workers,” he said. “It really hurt morale.”
Safeway Chairman, President and CEO Steve Burd, said in a press release, “This new agreement will provide employees with the best wages, benefits and working conditions in the Southern California retail market, while making certain Vons has the tools to thrive in a highly competitive environment.”
Mr. Burd, an advocate for healthcare reform, added, “This contract also contains some unique and groundbreaking reforms in the healthcare plan. We know from experience these changes will create an improved health plan for our employees that focuses on improving their health through prevention and wellness while simultaneously helping control escalating healthcare costs.”
Discussion Questions: What will the ratification of the new labor contract in southern California mean for workers and the chains involved as they continue to go up against non-union competitors? What will the deal mean for labor negotiations between the UFCW and other chains in other markets around the country?
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Undoubtedly the contract will be ratified by the grocery workers. Labor and management will be relieved to avoid a work stoppage. The contract does not address the most important issue: that nonunion firms have taken major market share from union supermarkets, and nonunion firms have much lower costs. The labor cost gap will rise further under the new contract. The labor union members should be rewarded with extra raises for successfully organizing nonunion firms. They don’t have to organize every Wal-Mart, Target, and Trader Joe’s in the country. Every journey starts with the first step. Just organize one location, then one more, etc. Isn’t it amazing that the union has not successfully organized one nonunion location out of so many possible opportunities? Nonunion retail workers are legendary for their unhappiness. It’s not like the union has nothing to offer them.
The survival parade will continue after ratification. The chain retailers will raise prices as “subtly” as possible and try to aggressively compete with the growing number of non-union guys via heavy promotional activity. Since Southern California’s largest population growth is coming from the lower economic sector, the big, public chains will be tested to determine the extent of their ingenuity and merchandising acumen for increased sales–and they must show growth or lose Wall Street’s support.
Will the union be successful in organizing the non-union food retailers in Southern California, which they should do? Logic does not always accommodate necessity so I suspect there will be no new unionization and that could mean less union employees when the next contract comes up.
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Undoubtedly the contract will be ratified by the grocery workers. Labor and management will be relieved to avoid a work stoppage. The contract does not address the most important issue: that nonunion firms have taken major market share from union supermarkets, and nonunion firms have much lower costs. The labor cost gap will rise further under the new contract. The labor union members should be rewarded with extra raises for successfully organizing nonunion firms. They don’t have to organize every Wal-Mart, Target, and Trader Joe’s in the country. Every journey starts with the first step. Just organize one location, then one more, etc. Isn’t it amazing that the union has not successfully organized one nonunion location out of so many possible opportunities? Nonunion retail workers are legendary for their unhappiness. It’s not like the union has nothing to offer them.
The survival parade will continue after ratification. The chain retailers will raise prices as “subtly” as possible and try to aggressively compete with the growing number of non-union guys via heavy promotional activity. Since Southern California’s largest population growth is coming from the lower economic sector, the big, public chains will be tested to determine the extent of their ingenuity and merchandising acumen for increased sales–and they must show growth or lose Wall Street’s support.
Will the union be successful in organizing the non-union food retailers in Southern California, which they should do? Logic does not always accommodate necessity so I suspect there will be no new unionization and that could mean less union employees when the next contract comes up.