California grocery worker strike potential and labor negotiations

California Grocery Workers Strike

The Year 2003 witnessed some dramatic events across California with more than 65,000 employees of the major grocery supermarkets, (Albertsons, Ralphs (Kroger) and Vons and pavilions (Safeway)), protesting against their employers wage and health care benefits policies. [Alex Veiga] the demonstration that ensued was one of the largest of its kind extending to an unprecedented 144-day strike that created problems for everybody including the customers, employees and the employers. [Amaris White] by the end, however, it was the customers and the workers who were the most affected. The workers had to settle for a new two-tier pay system with separate compensation plans for new and veteran workers, and almost halved health insurance compensation. These multi-billion-dollar grocery chains that were professional competitors formed a strange strategic alliance to quell the strength of the protest organized by the United Food and Commercial Workers (UFCW). The UFCW has more than 1.3 million members with 1 million workers from the grocery industry alone. [UFCW]

The reason for this squeeze on employee benefits was the proposed entry of Wal-Mart, the supermarket Giant with its planned opening of more than 40 superstores in California. The approximate loss due to strike for the grocery stores together was put at around $2 billion, however, the benefits to be realised with the implementation of the new contract was more in the long-term perspective. [Alex Veiga] With the expiry of the contract this year, the tension has mounted, and already negotiations are going on with the employees crying out the unfairness of the previous settlement and pressing for new and improved benefits.

The situation has become volatile once again and a potential strike of the grocery workers is looming large. This time, the rationale of the Supermarket employers, that of the impact of Wal-Mart's low cost non-union competition, does not appear to be convincing. In southern California, Albertsons, Vons, Kroger along with Stater Bros and Food 4 Less control two thirds of the total grocery market. Even with the opening of its 22 supercenters across the city, Wal-Mart has managed to capture only 3% of grocery market of California. As Harley Shaiken, an economist and professor of Berkeley University states, "Wal-Mart served a useful purpose for the chains. Wal-Mart was the 800-pound gorilla at the bargaining table in 2003. In 2007, it's the 80-pound gorilla. it's still a presence, it will be an important factor, but it's obviously moving slower than projected." [Abigail Goldman].

The current crisis started with Albertsons (Supervalu) chain store management unwilling to provide a decent healthcare plan and hourly compensation for its new employees. A recent study by Berkley University found that only 7% of Southern Californian grocery workers who had been inducted after the previous strike receive health benefits. [Alex Veiga] as a corporate solidarity measure, this time the three major South Californian Grocers namely Albertsons (Supervalu), Ralphs (Kroger) and Vons (Safeway), made a 'mutual aid pact' that stymied the negotiations between the employers and the members of the UFCW. As the UFCW president and director Shaun Barclay says, "This pact fits the same pattern of their actions three years ago when they forced UFCW members and their families into the streets and disrupted shoppers for nearly five months in a grab to end meaningful health care coverage for employees."

UFCW] the pay hikes that the CEO's of these supermarkets received last year attests to their improving profitability proving that the supermarkets are crying wolf. [UFCW]