UFCW wants to sell bad contract

I just saw UFCW honchos on the news calling this a great win because they've gotten the grocers to back-off on the two-tier pay structure. Even assuming this part is real, closer inspection reveals the UFCW's triumphant victory is anything but.

According to the SF Chron story (which I've pasted below), if ratified, under this great contract between the UFCW and Safeway, Albertsons and Kroger:

--Health co-payments for workers hired after ratification will increase by some unspecified amount
--The amount retired workers pay to maintain their health plans will increase from $0 to $70/month
--The number of hours new employees will have to work to rise to the top of the pay scale will go up to 7,800. This is four times the hours previously required.
--It will take new hires six years to reach the top level of health care benefits and wages, up dramatically from before (back-door two-tier?)
--The grocers will also get the option to buy-out veteran workers to reduce labor cost

"Grocers, unions reach contract terms
Tentative deal averts labor strife that roiled south state"
George Raine and Todd Wallack, Chronicle Staff Writers
Tuesday, January 25, 2005

A tentative contract settlement has been reached between the unions representing 20,000 Bay Area grocery workers and the three major chains that employ them, the first step in averting a replay of the Southern California labor dispute that left thousands out of work for months last year and cost the companies millions.

California's grocery industry -- anchored by Safeway, Albertsons and Kroger -- has engaged in intense labor negotiations over the past year. The store owners argued that "big box" competitors" like Wal-Mart and Costco posed a major threat, while union leaders resisted reduced benefits and two-tiered wage structures.

The Bay Area agreement, struck late Sunday and up for a ratification vote by union members in coming weeks, does not include a permanent, two-tier system of wages and benefits -- a kind of class system that the union ultimately agreed to in Southern California, according to a labor spokesman. However, there is a longer progression for new hires to reach the top tier for both wages and benefits.

"This is a very good contract in a very tough context -- the precedent in Southern California and in the shadow of Wal-Mart,'' said Harley Shaiken, a labor specialist at UC Berkeley. "I think what the union was able to do is preserve some important precedents while making some painful sacrifices. And in the long term, the precedents may prove more important.''

Safeway and Albertsons officials did not return telephone calls, but the companies issued statements saying they were pleased to announce the tentative agreement. They offered no details about its contents. The workers will be voting via mail, and the results will be know in two to three weeks.

Negotiators for the eight locals of the United Food and Commercial Workers in the Bay Area unanimously said they would enthusiastically recommend ratification of the tentative deal. The pact will affect another 10,000 UFCW members employed by other stores in the Bay Area.

Currently, a journeyman clerk earns $19.08 an hour, said Richard Benson, president of UFCW Local 870 in Hayward. The proposal is to require new employees to work 7,800 hours, beginning at about $8 an hour, to reach the top tier. Attaining top scale would require working full-time for 3 1/2 years under the new deal, compared with one year under the current contract. It would take new hires six years to reach the top level of health care benefits, the union said.
New employees hired after ratification also would have higher co-payments for visits to doctors' offices and prescription drugs, but the proposal would not add an employee health care premium co-pay.

"What makes this a good deal?" Ron Lind, a spokesman for the coalition of UFCW locals, asked rhetorically. "They avoid a two-tier system, maintain good benefits, they do not have premium-sharing, and they do not have to walk a picket line for 4 1/2 months to get it. I'm confident that the vast majority of our members will ratify this.''

Lind, at a news conference at UFCW offices in San Jose Monday, said accepting three levels of health care for new hires -- although they get top-tier benefits if they stay long enough -- was a difficult compromise for the union. Moreover, retirees beginning next month will have to pay $70 per month for health care for themselves and a spouse, if the deal is ratified. Hitherto, they paid nothing.

A bonus is proposed for workers -- 25 cents for each hour worked last year -- and a pay raise of 25 cents per hour for those receiving top scale, effective Dec. 3, 2006. The current contract has four steps in pay grade; the proposed deal has nine.

"We could have gone for a bigger wage increase, but it would have had to come out of our health care benefits plan, and that was our priority," said Lind.

"Some difficult decisions had to be made in order to avoid a dispute, but with marathon bargaining sessions over the past week we were able to preserve important components of our contract," Lind said. That included maintaining both union and employer trustees looking over the health care plan and prevailing, the union said, where the employers wanted to weaken job security.

Lind said that the general outline of the settlement followed that of the contract recently approved by grocery workers in the Sacramento Valley, an agreement upon which the Bay Area locals built.

The Sacramento Valley workers accepted annual health care deductibles -- up to $600 for veteran workers and $1,800 for new hires.

As in the Sacramento Valley, the employers in the Bay Area would have the option of offering buyouts to veteran workers and thereby reducing their labor costs. However, Lind said while that Safeway had shown an interest in offering buyouts,
Albertsons had not. The two chains combined have 182 stores in the Bay Area.

Lind called the agreement in Northern California the best in the grocery industry in the nation, and Mitchell Corwin, a financial analyst with Morningstar in Chicago, noted it was far better than last year's Southern California deal.

"I don't think either side wants to go through what they went through in Southern California,'' said Corwin. "Both sides lost in Southern California. Both sides really wanted at the end of the day to get something done.''

Scot Beckenbaugh, acting director of the U.S. Federal Mediation and Conciliation Service, commended both sides for striking a deal. "This tentative agreement is important to the Bay Area economy and is crucial to the livelihoods of thousands of employees and their families and to the companies for whom they work,'' he said.

Shaiken, at UC Berkeley, noted the union victory in escaping responsibility for their health care premiums, which can and have increased dramatically.

"Health care is not simply the 800-pound gorilla of labor negotiations, it is a wildly unpredictable gorilla," he said. "Higher co-pays are a fixed cost. But if they pay the premiums, they can rise in a way that is high and unexpected.''

Benson, the Local 870 president, said that negotiations had close to collapsing at the eleventh hour in a struggle over job security. He said the employers wanted the option of having courtesy clerks do the work of apprentice food clerks, a higher classification. "While it seems like a small issue, it can be a huge issue,'' said Benson. "They would have saved an enormous amount of money, but they backed off,'' he said of the employers.

Lind said that the 85,000 signatures gathered from largely Safeway customers in the Bay Area, saying they would support the workers in the event of a strike or boycott, had influenced the talks.

The tentative contract agreement between Bay Area union food clerks and Safeway, Albertsons and Kroger includes:
-- There will be no permanent two-tier workforce in wages and benefits.
-- Co-payments for office visits and prescription drugs for workers hired after ratification will be increased.
-- Retired workers will begin paying $70 per month to maintain health plans.
-- New employees will have to work 7,800 hours to rise to the top of the pay scale, nearly four times as long as current workers were required.
E-mail the writers at graine [at] sfchronicle.com and twallack [at] sfchroicle.com




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