Labor & your groceries: Chains can afford to share the wealth
It's deja vu all over again. That's how many Southern California shoppers are feeling about current grocery negotiations. It is because the supermarket chains remain locked into the same thinking that three years ago forced 60,000 grocery workers into the street for nearly five months. That shouldn't be the case.
Back then the grocers claimed, as they claim today, that employees' wages and benefits keep them from competing effectively, and that profit margins are so thin they can't share their success with the employees who help generate it, so they just had to cut wages and health care. We know now that just isn't true.
After the markets got their way in 2004, their competition never materialized, profits surged to record levels, grocery workers haven't had a raise since 2002, and now nearly half of the 80,000 Southern California grocery workers are without health care, including 20,000 of their children.
The fact is the markets are enormously successful, commanding significant market share not just in Southern California but everywhere they operate. They can afford to share their success with their employees.
Just how successful are the markets? Here are the facts, from the companies' own submissions to the Securities and Exchange Commission on their profits:
- Kroger, which owns Ralphs, reported profits of $3.4 billion in 2006;
- Safeway, which owns Vons and Pavillions, netted $2.6 billion; and
- Supervalu ---- the new owner of Albertsons ---- reported a profit of $2.3 billion.
The CEOs of Ralphs, Vons and Albertsons haul in tens of millions in compensation every year, while fewer and fewer grocery workers have affordable health care. In 2003, 94 percent of grocery workers were covered. Today, that number has dropped to only 54 percent. And workers have not gotten a wage increase in five years.
It doesn't have to be deja vu all over again. Members of the United Food and Commercial Workers Union have already ratified forward-looking agreements with two regional grocers ---- Stater Bros. and Gelson's. It's a model agreement that recognizes both the competitive dynamics of the industry and the contributions that the grocery workers make in helping their companies achieve success. The agreement provides for moderate wage increases, an end to the unfair two-tier system for new workers, and affordable, quality health coverage for all employees.
Jack Brown, the chairman and CEO of Stater Bros. Markets, noted that to be successful he needs a quality, career-oriented workforce. Raising wages and providing reasonable benefits allows Stater Bros. to maintain a stable workforce. For workers, that means the peace of mind to provide excellent customer service, provide for their families and be productive members of the community. For Stater Bros., having a stable workforce is much more cost-effective in the long run.
That Stater Bros. and Gelson's can do this is worth noting because they do not enjoy the economic clout and market power that the national chains do. Ralphs, Vons and Alberstons, whose combined store base is 3,000 percent of Stater Bros. and Gelson's, are clearly financially able to honor a contract along the same lines as the regional chains. It would be the reasonable and fair thing to do. But as long as the supermarkets continue offering employees and shoppers only lip service and little else, a fair contract remains elusive.
In effect, the national chains are insisting ---- as they did in 2003 ---- on Wal-Mart-style working conditions that shift much of the cost of employee compensation from the companies to communities. California taxpayers dish out $86 million annually to provide health care and public assistance to Wal-Mart employees. If Kroger, Supervalu and Safeway continue down the path they set during the 2003-04 strike/lockout, California taxpayers would have to pony up an additional $410 million annually in public assistance to retail food workers.
The UFCW is committed to reaching a fair agreement at the bargaining table ---- one that has a positive effect for employees, shoppers, the companies and our communities. We are doing everything possible to attain that end ---- and that includes making sure that elected officials are aware of the costs that come with Wal-Mart-style employment practices.
The big supermarkets have become prisoners of thinking that says success can't be shared, employees have no right to expect hard work to translate into jobs that can pay the bills, and shoppers should blame workers ---- their friends and neighbors ---- for standing up and insisting otherwise.
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