Negotiators for Kroger and a union representing about 8,500 employees in 70 supermarkets in three states have reached tentative agreement on a new contract.
Kroger spokesman Gary Rhodes says the agreement, subject to ratification by union members, includes wage increases and improvements in health insurance coverage.
He says negotiators agreed to the deal about two this morning. He declined to comment on its details.
A United Food and Commercial Workers Union Local 1099 Web site confirmed the deal.
BY ADAM GELLER ASSOCIATED PRESS
JONQUIERE, Quebec-- The signs topping sales racks wear the same yellow smiley face, but promise "Chute de Prix," instead of price rollbacks. The boxes of Tide lining the shelves in housewares come packed with a bonus CD, just for Canadian stores, inviting shoppers to experience "la passion du Hockey."
But except for a few tweaks, the low-slung gray and blue Wal-Mart store off highway 70 could be almost any one of the retail Goliath's nearly 5,000 discount emporiums in the United States and eight other countries. And that's what worries executives at the Arkansas headquarters of Wal-Mart Stores Inc.
While still not a certainty, the 165 retirees, single moms, students and other hourly workers at this store 2 1/2 hours north of Quebec City could soon become the first anywhere to extract what the world's largest private employer insists its 1.5 million "associates" around the world neither want nor need-- a union contract. A government agency has certified the workers as a union and told the two sides to negotiate.
"One person against Wal-Mart cannot change anything," said Gaetan Plourde, a fiery 49-year-old sales clerk in the store's home electronics department, explaining simmering frustration over the store's pay, scheduling and other practices. "Wal-Mart wants to be rich, but it won't share."
Wal-Mart responds that it does share its cost savings with consumers through lower prices and that it treats its workers fairly. The company has redefined retailing by squeezing its suppliers and keeping a tight lid on other costs, including labor, allowing it to undercut competing stores. That translated last fiscal year into profits of more than $9 billion on sales of $256.3 billion.
It would be easy to overlook events in northern Quebec-- a region separated from the nearest big city by more than 100 miles of thickly wooded mountains seemingly planted with more moose crossing signs than houses, in a province known for its idiosyncratic labor laws-- as purely local.
But it's not. There has been angry name-calling by workers riven into pro-union and anti-union factions and accusations of intimidation by managers and threats of a lawsuit by the United Food and Commercial Workers Union.
And on Wednesday, Wal-Mart, referring to the strife, said the store was losing money and might have to close.
"If we are not able to reach a collective agreement that is reasonable and that allows the store to function efficiently and ultimately profitable, it is possible that the store will close," Andrew Pelletier, a spokesman at Wal-Mart Canada, said in an interview.
The buzz at the Jonquiere store is no accident. It is just the current focus in a larger chess game, waged by labor organizers in stores scattered across Canada-- including two other Wal-Marts in Quebec, where union spokesman Michael Forman said employees have also applied to the provincial labor board for union certification.
The public jockeying over Jonquiere is also also geared to capture the attention of workers in the United States.
Hourly wages are Wal-Mart's biggest single operating cost, about 35 percent to 40 percent of the bill to run its stores. Benefits are second. Those costs have been rising, pushed higher by factors including health care bills and the retailer's entry into more expensive cities.
Wal-Mart says the average hourly wage of its U.S. workers is $9.96 an hour-- just below the $10 an hour average pay for U.S. discount department store workers and short of the $10.87 an hour earned by the average supermarket employee.
But pay and benefits are substantially better at some unionized food stores. A strike by Southern California supermarket workers-- most making $12 to $15 an hour-- early this year came after grocers sought to cut pay for entry-level workers and shift health-care costs. The concessions were essential, grocers said, if they were to compete with Wal-Mart.
Wal-Mart defends its pay as very competitive, and says its chief concern with unions is that they would get in the way of doing business.
Even if a union gains entry, it will come slowly and make only an incremental difference in Wal-Mart's costs and profits, said Emme Kozloff, an analyst who tracks the retailer for Bernstein Research in New York.
But it's the perception among employees and shareholders, as much as the bottom line impact, that concerns Wal-Mart, she said.
"I do think the union thing would be a symbolic blow externally and internally, but they're probably gearing up to handle something like this," she said. "For a retailer, the biggest component of your cost structure is labor and so you're going to be darn sure you do everything in your power to make sure you avoid an increase."
Wal-Mart, whose sweeping reach and zealous pursuit of lower prices has made it a potent economic force, does little to disguise its distaste for unions. It has built such a high wall against organized labor that it's not clear what would happen if a single brick was yanked loose.
Maybe, as has been the case often before, Wal-Mart's bankroll, tenaciousness and skill at buying time will win out and the union effort here will fizzle. Maybe nothing more will come of it than a few extra cents an hour for a handful of workers-- a financial non-event for a company whose annual sales are larger than the economies of all but 20 countries.
Or just maybe, something else happens-- a prospect the union savors--something with an impact beyond Jonquiere.
"It's a little bit like watching a hurricane form," says Robert Hebdon, a professor of labor relations at McGill University in Montreal. "You don't know whether it's going to be just be a little bit of wind ... or whether it's going to be a storm, a full blown storm."
The whispered complaints began almost three years ago, months after Wal-Mart opened on the fringes of town, in what used to be a cow pasture. It was only two or three employees at first, grumbling mostly to themselves. Some, like Patrice Bergeron, were irritated about what they perceived as pay inequities-- he was making $7.70 an hour (about $6.05 in U.S. dollars) stocking groceries, while a co-worker was earning $8.50. Others say they were angered about the way managers locked the doors on workers restocking shelves after the store closed, making it impossible for them to take their lunch break even though they were not being paid for the time.
Soon, there was a small but growing cadre of workers, including Bergeron, who is 24 and lives at home with his parents, and Pierre Martineau, a 60-year-old maintenance man with a salt-and-pepper mustache who took the job at Wal-Mart after losing a similar position when the car dealership where he worked closed.
Their clandestine discussions were almost out of character in a region where union membership has long been worn proudly.
While union membership levels have declined in the United States to about 13 percent of the labor force, about a third of all Canadian workers are unionized. Quebec is even higher, with about 41 percent of its workers in unions.
The broad valley cupping Jonquiere is where Canada's first national union was formed, in nearby Chicoutimi in 1903, by pulp mill workers. It is the same place that earlier this year, unionized workers at a nearby smelting facility owned by aluminum giant Alcan Inc.-- informed that the company intended to close a line and cut their jobs-- defied managers and took control of the plant for six weeks.
"You can't live in Jonquiere ... and not have a friend or a relative, a wife or a husband or a father who is unionized," says Serge Lemelin, a reporter for regional newspaper Le Quotidien. "It's a chateau-fort-- a kind of fortress for the unions here."
Even so, the talk about a union did not win universal support in the new Wal-Mart, with some workers worried it might cost them their jobs, others rejecting the idea of paying union dues.
Soon word got back to managers. Exactly what happened next depends on who is providing the account.
Martineau said the situation grew tense after managers called his name on the intercom one morning shortly after 7 a.m., soon before opening. He says he went into the employee's assembly room, only to find himself surrounded by department managers, including one who jumped up on a table to talk, demanding that he explain his organizing activities. Soon after, many of the other employees stopped talking to him, and managers began pressing him to work faster. He accuses one department manager of trying to run him down with her car while he was collecting shopping carts from the parking lot.
The store's manager would not comment for this story, referring all questions to a Wal-Mart spokesman who denies there has been any intimidation. A department manager said all supervisors had been instructed not to speak because of threats by the union to file suit.
A worker, Noella Langlois, who opposes unionization, downplays Martineau's account and denies knowledge of other parts of it, saying managers were always fair. But she agrees that the mood inside has turned increasingly bitter.
"The atmosphere in the store has totally changed," she says, like her co-workers, speaking in French through an interpreter. "Instead of helping each other, it's become 'It's not my responsibility. It's not in the job description.' "
Martineau says the pressure soon began to rattle him. "I would just go into the restroom and cry," he says. "I couldn't take it."
A statement released Wednesday by Wal-Mart questioned the store's viability given what it called a "fractured environment" there.
Forman, the UFCW spokesman countered that "the company never has made noise that the store is underperforming. ... The company is obviously afraid that there's a snowball effect."
Wal-Mart's Pelletier said the store has never made money and its finances have gotten worse over the past few months. Asked whether the company was using intimidation tactics in hinting that the store could close, he said no, and added, "we think we are being realistic and honest."
Forman's response: "It's not about profitability, it's about power."
Protocol says that each day, workers at Wal-Mart stores are supposed to join in shouting a cheer, attributed to founder Sam Walton. The company says it demonstrates its bond with workers, and through them, its customers.
"Give me a W!," workers begin the cheer, which soon has them shouting out the company name. "Whose Wal-Mart is it? My Wal-Mart!"
But just how employees should exercise their stake in Wal-Mart has long been a subject of virulent disagreement between the company and unions bent on recruiting its workers.
"We don't feel like a union is right for Wal-Mart in any part of the country," said Christi Gallagher, a spokeswoman at the retailer's headquarters in Bentonville, Ark.
Gallagher notes that Canadian laws and custom are different, but that the company's thoughts on unions transcend borders.
"It's something (the Canadian unionization campaign) that we're certainly aware of in Wal-Mart U.S., but I can tell you our position and thoughts about the union in general are the same. We just don't feel like the union would add anything to our culture or improve our relationships with our associates."
Union officials are no more generous when it comes to their appraisal of Wal-Mart. But if Wal-Mart's employees are dissatisfied, unions have failed miserably at tapping that sentiment.
The closest a U.S. union has ever come to winning a battle with Wal-Mart was in 2000, at a store in Jacksonville, Texas. In that store, 11 workers-- all members of the store's meatpacking department-- voted to join and be represented by the UFCW. The union represents employees at many of the nation's supermarkets and, while it is not the only union that has targeted Wal-Mart, it has long been the retailers' principal adversary in organized labor.
After the Texas vote, Wal-Mart took a stance that has become typical-- and is now being echoed in Canada-- arguing before labor officials that any union should represent all employees at the store. That argument was rejected. But Wal-Mart announced a change that it said had long been planned and had nothing to do with the Texas store. It eliminated the job of meatcutter company-wide, and announced it would only sell pre-cut, pre-wrapped meat.
In theory, the case of the Texas meatcutters, who were offered other jobs by the company, remains alive before the National Labor Relations Board. But none of the 11 employees who voted to unionize still work at the store and the union campaign there has stalled.
Unable to get in through Wal-Mart's front door, union leaders have been trying the latches on the rear windows of the retailer's North American business. They think they've found an opening in places like Jonquiere and six other stores spread across three Canadian provinces.
"It's the contract that's the key," Forman said. "It's not that the people are going to walk away millionaires. They're not. But when you start publishing that (first contract), then we'll republish it in the millions. When you start moving it to different people, whether they're in Canada or Texas or Washington, it's huge because ... what they'll see in front of them is hard evidence that there are some Wal-Mart workers out there who are doing better than them."
Officially, this is a Canadian campaign. But the U.S. interest is clear. Union officials on both sides of the border have designated the Canadian stores for a program called SPUR-- Special Project Union Representation-- earmarking money from Washington and Toronto for local organizing campaigns.
Regardless of what happens, the faceoff in Canada provides a compelling case study in Wal-Mart's infinite creativity in keeping itself union-free.
Wal-Mart entered Canada in 1994 by buying 122 stores in the discount Woolco chain, and putting its name on them. In doing so, the retailer took a pass on 22 Woolco stores-- including the only 10 whose workers were represented by a union. The company portrays it as a coincidence, the union is certain of more sinister intentions.
Two years later, the Canadian affiliate of the United Auto Workers tried to organize workers at a Wal-Mart in Windsor, Ontario, just across the border from Detroit. It won a fleeting victory without a vote when the government certified workers as a bargaining unit based on the number who signed membership cards.
But that drive fizzled as some of the pro-union workers left for other jobs before a contract could be approved. That never happened, and the retailer lobbied the Ontario government to change its law to insure that no store could ever be unionized in the province without a vote. The law that resulted is known here as the Wal-Mart Exception.
The current battle between Wal-Mart and the union is more intense and fought on more fronts. But both sides are using much the same strategy-- probing, searching for weaknesses.
In Weyburn, Saskatchewan, the union collected enough membership cards to apply for government recognition. Wal-Mart countered by going to court, claiming the provincial government's laws violated the Charter of Rights and Freedom-- Canada's constitution-- by preventing the retailer from communicating its point of view to workers. Workers in that store and another have retained a lawyer to fight the union's efforts, a move that the retailer hails but says it played no role in.
In Thompson, Manitoba, the union has twice sought-- and lost-- a vote to represent workers.
In Moose Jaw, Saskatchewan, the union is asking the government to recognize it without signing up any workers. It bases its claim on the fact that the city once was home to one of the unionized-- and now shuttered-- Woolco stores, and that it has successor rights to represent workers.
Then there is Jonquiere, where the two sides have parried for the past year over how to proceed.
Despite managers' discouragement, talk of a union continued in the store, slowly finding new converts. Sylvie Lavoie, a part-time cashier, says she began to listen after she applied a third time for a full-time position, and saw it given to a new hire. Johanne Desbiens came around when she and Lavoie both applied for a supervisor's position and saw it given to a co-worker with less experience.
But pro-union workers say the balance only shifted in their favor after what at first seemed a failure. In April, after the union collected membership cards from more than 35 percent of the workers, the provincial labor board oversaw a vote on representation, held at the store.
As it often does, Wal-Mart demanded that managers be allowed to cast ballots. That was ruled out, but it didn't matter. The union lost by nine votes.
When the results were announced in front of television news crews set up in the store's parking lot, about two dozen managers and employees who opposed the union began a loud celebration, dancing and shouting the company cheer. Langlois, who was part of that group, says it was justified because many workers were so relieved to be rid of a union that had repeatedly sent canvassers to their homes and soured their workplace.
But pro-union employees said co-workers who had been on the fence found the celebration boastful and unbecoming. Harold Roy, a former teacher who had taken early retirement and now works as maintenance man in the store, said it was only then that he swung to the union's side.
Enough minds were changed for the union to persaude more than half the workers to sign membership cards, enough for the provincial labor board to certify a union without a vote and instruct the two sides to negotiate a contract. Each side now says it is waiting to hear from the other. But Quebec law will not let them put it off forever. If Wal-Mart resists negotiating, the union can ask for a mediator, who could then issue an interim contract.
To Wal-Mart, it smacks of an antiquated law that is disenfranchising both the company and employees.
"We are very disturbed that in Jonquiere we have a situation where our associates were not given the chance to vote," spokesman Pelletier says. "We believe that the only way to ensure that employees can express their views without coercion or intimidation is by allowing a secret-ballot supervised election to take place."
To the union, the events in Jonquiere are precisely the entry point it's been searching for. "For the first time Wal-Mart will have to sit with us at the negotiation table," says Louis Bolduc, who directs the union's activities in Quebec province. "We're not going to let them play with us."
Then there are the workers who signed the union cards. They know the company's viewpoint, as well as the union's. But for many of them it is about something both larger and smaller than the grand strategies of the two sides.
"I didn't do this to unionize other Wal-Marts," says Lavoie, the cashier. "I did it for me."
Competition, high insurance costs block compromise. (Long article but good)
By RUSS MITCHELL
The New York Times
BERKELEY, Calif. -- Draped in a blue apron, a supermarket clerk squatted on a parking lot curb, taking a break from work at a Safeway supermarket in an affluent neighborhood here.
"I make about 10 bucks an hour," he said. "I don't know how they expect us to pay for health care out of that."
The clerk, who is single and in his 50s, said he had little money left after paying rent on a small apartment in what he called the "low-rent end" of nearby Alameda, where one-bedrooms bottom out at about $800 a month. He is upset that his employer wants him to pay more for health insurance, but he said he would rather not give his last name because of "all the strike talk and all." Does he expect a strike? "Could be," he shrugged. "We'll see."
With bitter memories of a long strike still fresh, the supermarket industry faces a new showdown between labor unions determined to hang on to health insurance benefits and management that is girding to meet increased competition from low-cost rivals like Wal-Mart Stores.
The same issues were behind the 41/2-month strike and lockout in Southern California that ended in February, attracting national publicity and leaving both sides exhausted. Nearly 60,000 union workers lost a third of their annual pay, while the parent corporations of the grocery chains -Albertsons, Safeway and Kroger -- shed $1 billion in profits, much of it spent trying to lure customers back into their stores with price promotions.
Now the attention has shifted to Northern California, the next stop on a patchwork of regional negotiations. Scarred by the Southern California experience, both sides will try to avoid a strike. But compromise will be hard to come by.
Unionized supermarket chains have been paying 100 percent of most workers' health care premiums for decades, and Steven A. Burd, the chairman and chief executive of Safeway, says they have "become a runaway cost, not just for us, but for industry in general."
The days when supermarkets could tolerate the costs ended with the arrival of nonunion competitors, especially Wal-Mart, he added. Supermarkets need to deal with the issue "before we find ourselves in the same situation as the airline industry," rife with layoffs and bankruptcy, Burd warned. He likens the competition from Wal-Mart to airline industry competition from JetBlue. (Albertsons, the other major party in the Northern California negotiations, declined to comment.)
The issue is not unique to the supermarket industry. Negotiations between the United Auto Workers and Caterpillar Inc. are bogged down over who will pay for health benefits. In San Francisco, service workers are striking against major hotels; the top issue there, too, is health benefits.
Richard L. Benson, president of United Food and Commercial Workers Local 870 in nearby Hayward, placed more blame for the problem on nonunion chains and on the health care industry than on Safeway and Albertsons. But, he added, "we are not going to allow the solution to be `pass the cost on to employees, and then let's move on.' "
The costs are substantial, and growing. While consumer inflation ticks along at 2 to 3 percent, driven mostly by volatile markets for oil, health insurance premiums have climbed more sharply. They increased 14.7 percent in 2003 and are expected to grow 12.6 percent this year, and although inflation is forecast to slow in 2005, double-digit increases will be the norm for years to come, according to Hewitt Associates.
"Employers can't take on 12 to 14 percent annual increases in health care," said Tom Beauregard, a health care consultant at Hewitt. "The cost increases we see are not sustainable."
As a result, employers -- the main providers of health care coverage in the United States -are shifting more benefit costs to their workers. Hewitt reports that while employers' shares of health care spending will hold steady this year, workers will see their average annual contribution for family coverage rise to $1,565, from $1,276.
As President Bush and Sen. John Kerry argue over health care at the national level, individual states are having their own debates. In California this fall, voters will be presented with Proposition 72, which would require companies with 200 or more workers to pay at least 80 percent of the health care premiums for employees and their families; companies with 50 to 199 workers would have to offer insurance only to employees. If they did not buy insurance on their own, employers would pay into a state-run system that would provide private insurance.
The measure was driven in part by two recent studies at the University of California, which concluded that the low wages and benefits at chains like WalMart were forcing workers into welfare programs that cost the state nearly $3 billion. The Legislature's budget analysis group, however, said it could not estimate if the proposal would save the state any money.
Even under the kinds of programs that would be offered in Proposition 72, employers would continue to be the primary provider of health insurance. James C. Robinson, a professor of health economics at the University of California, Berkeley, said the focus on issues like premium payments missed the larger point: that health care costs would continue to rise, meaning that insurers and employers would need to offer a variety of health plan options with different benefits and costs.
"The employers' job is to make good options available to employees and the tools to help them decide," he said. "If you choose the higher-cost option, you'll pay more. If you choose the lowercost option, you'll pay less. Just like everything in life."
The trouble, Robinson says, is that most companies -- Safeway and Albertsons included -- do a minimal job of providing those options and tools. And employees wonder whether they can afford even the cheapest plans.
President Bush has made health savings accounts one of his central campaign remedies for the nation's health-care problems, but so far employers and workers have been slow to accept the accounts as an alternative to conventional health insurance.
People around the nation are now taking part in the annual enrollment season for health care plans, but only a tiny fraction of employers are offering the new plans. The plans let workers create tax-free savings accounts to use for medical costs, combined with lower-cost, high-deductible insurance to cover major medical care. Most employees who already have health benefits said in an insurance industry survey that they would be reluctant to switch even if they were offered one of the new plans.
The UnitedHealth Group, for example, the nation's largest health insurer, representing employers who cover more than 18 million workers, expects only about 150,000 of those employees to choose health savings accounts for 2005.
The plans, which were inserted without full House or Senate debate into last fall's 700-page Medicare legislation, are meant to provide basic, high-deductible insurance while letting people accumulate money tax-free to be spent on medical services or saved to pay for future health care needs.
Nonpartisan health policy experts say the plans are apparently too new and untested to appeal to many employers and may simply not be financially feasible for middle-income families.
"It's hard to imagine that a guy who makes $50,000 a year is going to have $2,000 for him and his family to stick in this plan," said Ira S. Loss, a health policy expert with Washington Analysis, a business consulting firm.
Insurance brokers say the accounts appeal primarily to lawyers, doctors and partners in small businesses who may welcome tax-free savings accounts for themselves. Many small businesses may like the plans as a way to reduce their own outlays for employee health insurance.
But a drawback for employers, experts say, is that workers can take their accounts with them when they change jobs -- undermining the employee loyalty and retention companies seek to cultivate by providing health coverage in the first place.
Union workers vs. King Soopers, Safeway and Albertsons.
Who is winning these contract negotiations? Wal-Mart.
"Always Low Prices." Stack it high, let it fly. No pesky union here.
Wal-Mart's foray into groceries has only just begun. The Bentonville, Ark.-based retailer is building 240 to 250 grocery-selling Supercenters per year.
In Colorado, it plans to open seven more in the next year. A new Sam's Club opened Thursday at the new Southlands center in southeast Aurora.
Other grocers are building new stores, too. What's alarming is that Wal-Mart didn't start out selling food, but it has quickly supplanted Albertsons as Colorado's third-largest grocer. Wherever Wal-Mart builds a Supercenter, every grocery store within 5 miles loses 20 percent of its business, according to King Soopers, Safeway and Albertsons.
To preserve profits, these three grocers must cut costs. They've asked union workers to contribute toward health care benefits that now come free.
That's not the most creative solution, but it is in line with an unfortunate trend. Health care insurers keep jacking rates, and employers are passing higher premiums onto employees. The grocery workers, however, are saying no.
Talks between grocery chains and the United Food and Commercial Workers now are on hold for several days as grocers prepare a final offer. If the United Food and Commercial Workers strike, they will only hurt the companies that tolerate them. Their picket lines would send customers to Wal-Mart, Target, Costco, Kmart, Whole Foods, Wild Oats and other nonunion grocery stores.
If the UFCW wanted to be effective, it would organize at Wal-Mart, sacking the world's largest company with the same labor costs that others pay.
"There's no question that if a union organized Wal-Mart employees, Wal-Mart wouldn't be able to charge the prices it does," said Cindi Fukami, a management professor at the University of Denver's Daniels College of Business. "The union wage premium is anywhere from 10 percent to 15 percent."
Unfortunately, UFCW has proven no match for Wal-Mart.
"Once Wal-Mart gets wind of us, they have this flying anti-union crisis team that comes in from Arkansas and immediately starts to drop the hammer," said union spokesman Dave Minshall.
Wal-Mart has been accused of confiscating union materials, spying on pro-union employees and illegally firing workers for union rabble-rousing.
Wal-Mart usually prevails. Union influence has been declining for decades, and the Bush administration isn't sympathetic to union claims.
When 10 Wal-Mart meat cutters legally joined the UFCW in 2000 at a store in Jacksonville, Texas, Wal-Mart announced that it would no longer use meat cutters. It now sells only pre-packed meats in all of its stores.
Wal-Mart officials called the timing of that announcement a coincidence. They've successfully argued there is no need for a union because they believe they treat their employees well.
The only union Wal-Mart in North America is in Jonquière, Québec, Canada. Wal-Mart recently complained about it in a news release: "The Jonquière store is not meeting its business plan, and the company is concerned about the economic viability of the store." We'll see if that store lasts.
If the UFCW can't infiltrate Wal-Mart, it should help King Soopers, Safeway, Albertsons and other union grocers compete with Wal-Mart. That might mean a painful concession. So far, the union doesn't seem prepared for that.
"King Soopers, Safeway and Albertsons could find some real savings besides the obvious one, which is cracking down on the workers," Minshall said. "You don't have to be like Wal-Mart to compete with Wal-Mart."
Maybe. But for now, America seems obsessed with "Always Low Prices. Always." Given that trend, it's not King Soopers, Safeway and Albertsons taking paid health-care benefits away from union grocery stores. It's Wal-Mart and everyone who shops there.
Some call that a bargain. Yet, when workers can't afford health insurance, we all end up paying for them anyway.
Today, the 1.4 million member United Food and Commercial Workers International Union (UFCW) unveils a massive display in the heart of the nation’s capital marking the daily body count of Americans killed and wounded in Iraq. These are the sons and daughters of working America who are making the sacrifice at the call of their government. The UFCW— a voice for working America— will never forget the sacrifice of our service men and women, their courage and commitment, and the grief of their families.
For the families of those who have fallen, we mourn your loss. For those who have been crippled and maimed in the service of their country, we honor your heroism and support you in your struggle.
We have placed a display here at the corner of K St. NW and 18th St. NW in Washington D.C. Every day we will update the count of American losses in Iraq so that corporate lobbyists and the foreign policy think tanks that dominate the canyons of K St. NW as well as the leaders around the corner at the White House and up the hill in Congress will always remember the impact of the policies that they advocate and the decisions that they make.
In Washington, the war in Iraq may be a matter of policy and politics. In working America, the war in Iraq is a matter of life and death, human sacrifice and suffering.
The UFCW will never forget. We want to make sure that those in power never forget either.
(Approximately 40 UFCW members have been killed in Iraq. Untold hundreds of immediate family members and relatives of UFCW members have been killed or wounded in Iraq.)
Each must find a way to live with Wal-Mart
By John Byczkowski
Enquirer staff writer
In an ideal world of business and labor relations, a labor agreement is a win-win situation. But what's happening between Kroger Co. and the union representing 8,500 workers in its Greater Cincinnati stores isn't ideal.
Kroger, facing a blitzkrieg of low-cost, mostly non-union competitors storming the market, says it needs to get its labor costs down so it can lower prices, get more customers, make more money and improve stores.
United Food and Commercial Workers Local 1099, which represents 8,500 meat cutters and clerks in 70 stores in the region, believes it accepted lower wage increases in the past years to maintain low-cost health benefits for its workers. The union is now resisting giving more.
The stalemate the two sides have apparently reached in labor negotiations doesn't bode well for a happy ending. "I believe in win-win negotiations," said Michael Doyle, who teaches labor relations courses for the Cincinnati chapter of the National Human Resources Association. "In some circumstances it might not work, and this might be the case, where you have two adversarial positions, and it might be tougher to get the win-win out of it."
The negotiations "are critical for the survival of the company, and they're critical for the effectiveness of unions," said Neil Stern, a retail consultant with McMillan/Doolittle LLP in Chicago. "Both sides have a lot riding on it, and that's what makes it so difficult."
Experts say both sides will lose if a stalemate leads to a strike.
Two strikes in the past year - a 141-day strike and lockout in Southern California that ended in February and shorter strike in West Virginia, southeast Ohio and eastern Kentucky - cost Kroger $228 million in lost profits. The company says it will continue struggling to win back customers in Southern California "for the foreseeable future."
The union lost as well in both Southern California and West Virginia: the agreements reached were less than what Kroger offered before the work stoppages.
Chuck Cerankosky, who follows Kroger for investment adviser Key McDonald in Cleveland, said non-union retailers pay their workers less, offer fewer benefits and have more flexible in scheduling. This saves money, and allows them to charge less.
"Kroger doesn't get a free pass that says they can charge more because they have a labor union," he said. "I've yet to find in my visits to all types of non-union food stores anybody asking at the door if the place is union."
Flexible contracts in cities such as Atlanta have allowed Kroger to remain competitive. "Kroger has shown it can operate very effectively with flexible labor contracts, but they've got to be more and more flexible because there are lots of non-union food merchants," he said.
But the UFCW is making a stand, and "it certainly is the kind of stand that a labor union needs to take if it's going to demonstrate that it's a legitimate representative of workers," said Rick Hurd, a professor of labor studies at Cornell University in Ithaca, N.Y.
"It's very simple to understand why the union wants to protect the benefits that its members get. It's not that the pay and benefits are so exorbitant they're out of line with other workers, because they're not. They're still relatively low-wage and low-benefit compared to workers in industry or in government."
What both Kroger and the UFCW are battling is Wal-Mart - a rapidly expanding, low-cost, vehemently non-union competitor. Local 1099 pointed out to its members earlier this year that Wal-Mart will build some 300 supercenters nationally, the equivalent of eight Pentagons of space selling groceries and merchandise.
For the union, Wal-Mart "creates a bargaining challenge and an organizing challenge," Hurd said. What's happening in Cincinnati illustrates the bargaining challenge, he said: Kroger stubbornly says it needs to lower the cost of wages and benefits to compete with Wal-Mart, and the union has to deal with it.
The organizing challenge is in trying to organize Wal-Mart workers. Hurd said the UFCW membership in North America is stable at about 1.4 million, but it hasn't organized a major retail chain in years. It'll be tough to organize Wal-Mart if the union is making concessions to other retailers.
Doyle agreed. "At the end of the day, any time you reduce an employee's total compensation, it's going to be a problem," he said. The union loses face, and the employer suffers damage to its image and recruiting.
And in a sector that's so fiercely competitive as groceries, "the last thing you need is a work stoppage," said Charles Little, a former Kroger human resources manager who works for a Blue Ash pharmaceutical company. "The consumers aren't going to go around any picket lines, so they'll just go to other stores."
By RUSS MITCHELL
erkeley, Calif.
DRAPED in a blue apron, a supermarket clerk squatted on a parking lot curb, taking a break from work at a Safeway supermarket in an affluent neighborhood here.
"I make about 10 bucks an hour," he said. "I don't know how they expect us to pay for health care out of that."
The clerk, who is single and in his 50's, said he had little money left after paying rent on a small apartment in what he called the "low-rent end" of nearby Alameda, where one-bedrooms bottom out around $800 a month. He is upset that his employer wants him to pay more for health insurance, but he said he would rather not give his last name because of "all the strike talk and all." Does he expect a strike? "Could be," he shrugged. "We'll see."
With bitter memories of a long strike still fresh, the supermarket industry faces a new showdown between labor unions determined to hang on to health insurance benefits and management that is girding to meet increased competition from low-cost rivals like Wal-Mart Stores.
The same issues were behind the four-and-a-half-month strike and lockout in Southern California that ended in February, attracting national publicity and leaving both sides exhausted. Nearly 60,000 union workers lost a third of their annual pay, while the parent corporations of the grocery chains - Albertsons, Safeway and Kroger - shed $1 billion in profits, much of it spent trying to lure customers back into their stores with price promotions.
Now the attention has shifted to Northern California, the next stop on a patchwork of regional negotiations. Scarred by the Southern California experience, both sides will try to avoid a strike. But compromise will be hard to come by.
Unionized supermarket chains have been paying 100 percent of most workers' health care premiums for decades, and Steven A. Burd, the chairman and chief executive of Safeway, says they have "become a runaway cost, not just for us, but for industry in general."
The days when supermarkets could tolerate the costs ended with the arrival of nonunion competitors, especially Wal-Mart, he added. Supermarkets need to deal with the issue "before we find ourselves in the same situation as the airline industry," rife with layoffs and bankruptcy, Mr. Burd warned. He likens the competition from Wal-Mart to airline industry competition from JetBlue. (Albertsons, the other major party in the Northern California negotiations, declined to comment.)
The issue is not unique to the supermarket industry. Negotiations between the United Auto Workers and Caterpillar Inc. are bogged down over who will pay for health benefits. In San Francisco, service workers are striking against major hotels; the top issue there, too, is health benefits.
Richard L. Benson, president of United Food and Commercial Workers Local 870 in nearby Hayward, placed more blame for the problem on nonunion chains and on the health care industry than on Safeway and Albertsons. But, he added, "we are not going to allow the solution to be 'pass the cost on to employees, and then let's move on.' "
The costs are substantial, and growing. While consumer inflation ticks along at 2 to 3 percent, driven mostly by volatile markets for oil, health insurance premiums have climbed more sharply. They increased 14.7 percent in 2003 and are expected to grow 12.6 percent this year, and although inflation is forecast to slow in 2005, double-digit increases will be the norm for years to come, according to Hewitt Associates.
"Employers can't take on 12 to 14 percent annual increases in health care," said Tom Beauregard, a health care consultant at Hewitt. "The cost increases we see are not sustainable."
As a result, employers - the main providers of health care coverage in the United States - are shifting more benefit costs to their workers. Hewitt reports that while employers' share of health care spending will hold steady this year, workers will see their average annual contribution for family coverage rise to $1,565, from $1,276.
In Southern California, Safeway workers accepted a two-tier wage and benefits system, similar to that in a deal reached in April, without a strike, at Giant and Safeway stores in Washington, D.C. Under the Washington plan, workers hired after the contract takes effect will for six years receive lower wages than veteran workers and fewer health benefits; part-time employees will begin paying $38 a week for family coverage. In Seattle, local unions rejected the two-tier system but agreed to pay a share of health premiums. Negotiations are continuing in Denver.
THE new contracts provide some cost savings for the supermarket chains, but not enough to compete effectively against nonunion rivals, said Jason Whitmer, an analyst at Midwest Research in Cleveland. "They need to be more competitive on cost to be more competitive on price," he said.
Supermarkets have still not fully recovered the market share they lost during the Southern California strike to discounters like Wal-Marts and Costco or to specialty markets like Trader Joe's and Whole Foods Market, he said. "Even Bed Bath & Beyond is selling food now," he said.
Union leaders acknowledge the need for the supermarkets to remain competitive, but they say Mr. Burd's comparison to the airline industry is an exaggeration. Safeway's financial performance is weakening, they say, but its returns regularly exceed its cost of capital, or the amount it estimates it could earn in another investment of comparable risk. (Albertsons and Kroger have not done as well in recent years, according to Stern Stewart & Company, a financial consulting firm in New York, though both still earn a profit.)
As President Bush and Senator John Kerry argue over health care at the national level, individual states are having their own debates. In California this fall, voters will be presented with Proposition 72, which would require companies with 200 or more workers to pay at least 80 percent of the health care premiums for employees and their families; companies with 50 to 199 workers would have to offer insurance only to employees. If they did not buy insurance on their own, employers would pay into a state-run system that would provide private insurance.
The measure was driven in part by two recent studies at the University of California, which concluded that the low wages and benefits at chains like Wal-Mart were forcing workers into welfare programs that cost the state nearly $3 billion. The Legislature's budget analysis group, however, said it could not estimate if the proposal would save the state any money.
Even under the kinds of programs that would be offered in Proposition 72, employers would continue to be the primary provider of health insurance. James C. Robinson, a professor of health economics at the University of California, Berkeley, said the focus on issues like premium payments missed the larger point: that health care costs would continue to rise, meaning that insurers and employers would need to offer a variety of health plan options with different benefits and costs.
"The employers' job is to make good options available to employees and the tools to help them decide," he said. "If you choose the higher-cost option, you'll pay more. If you choose the lower-cost option, you'll pay less. Just like everything in life."
The trouble, Professor Robinson says, is that most companies - Safeway and Albertsons included - do a minimal job of providing those options and tools. And employees wonder whether they can afford even the cheapest plans.
WASHINGTON, Oct. 7 /U.S. Newswire/ -- "There will be no health care for all Americans until our political leaders are willing to take on a health insurance industry that showers them with cash," said Douglas Dority today as he announced the launching of America's Agenda: Health Care for All. "Insurers have proven time and time again they will spend whatever it takes to perpetuate a system of financing that makes them wealthy while restricting care only to those who can afford it."
Dority, chair of the new organization that will help grassroots groups fighting for universal health care, is the former president of the United Food and Commercial Workers union (UFCW). He was joined by other union leaders, and by health care reform advocates from the business and medical communities and from Capitol Hill.
"The insurance companies with their scandalous profit-taking deny access to care to even those with insurance by practices of excluding pre-existing conditions, complex paperwork and uncovered benefits," said Dr. Claudia Fegan, president of the Physicians for a National Health Program (PNHP). "Over 12,000 physicians support a national health insurance program that will cover everyone with the money we would save from the administrative waste of our current system."
U.S. Rep. Tammy Baldwin (D-Wis.) said "it is time to put 'health care for all' at the top of our national agenda." She has introduced a bill that would give federal funding to states that institute programs expanding access to health care. Rep. Baldwin and Dr. Fegan have agreed to serve on the Advisory Committee for America's Agenda.
"Our medical system is dysfunctional and bad not just for our health, but for our entire economy," said Bernard Rapoport, founder and former CEO of the American Income Life Insurance Company. Rapoport, a member of the America's Agenda governing board, said "soaring costs are undermining the competitiveness of American business in the global economy. The U.S. is the only country in the industrialized world that doesn't have publicly- financed health insurance, so American companies are burdened with expenses others don't have, endangering our manufacturing base." As examples, he cited Ford Motor Co. that spends $3.2 billion a year on health premiums and General Motors that spends more on health than on steel.
"The American people are fed up," said Dority. "Poll after poll shows they want affordable health care that covers everyone. Why don't we have it? Because America's health insurance industry does everything in its power to block it . The current system may be a shambles, but it is a profitable shambles for those who run it."
Joe Hansen, Dority's successor as UFCW president and an America's Agenda board member, renewed the union's commitment to universal health care. "No one union, no one company, has a solution for the health care crisis," said Hansen. "It has to be a political solution."
"Out of control health care costs are a huge problem not just for workers but for employers who have health care plans," said Marty Maddaloni, general president of the United Association of Plumbers and Pipefitters. "It puts these employers at a competitive disadvantage with those who do not have such plans."
"I can think of no economic issue that impacts all working families in America more than the growing health care crisis," added Morty Bahr, president of the Communications Workers of America. "It is criminal that 45 million Americans are without any health insurance and that number is projected to go to more than 51 million in 2006." Both Bahr and Maddaloni serve on the governing board of America's Agenda.
Dority noted that in recent years concerned citizens from Massachusetts to New Mexico have waged statewide campaigns for universal coverage. Additionally, health care reform initiatives and legislative hearings are progressing in several states, "but the industry continues to spend astronomical amounts of money to defeat them."
Health insurers all across the nation have come together to create America's Health Insurance Plans (AHIP) to lobby for the status quo. AHIP will run a multi-million dollar campaign with offices in 46 different states. "In the recent past, effort after effort by state-level grassroots groups to reform our broken health care system has been defeated by the well-heeled health insurance lobby," Dority said. "We intend to help level the playing field. We must break the insurance lobby choke-hold on U.S. health care."
To support grassroots groups, Dority said that America's Agenda: Healthcare for All will utilize TV, radio, print media and the Internet to mount creative and coordinated "truth campaigns". Business leaders, physicians, elected officials, labor leaders and universal health care campaign activists will be effective "messengers of truth" about the costs and benefits of specific health reform proposals.
"We will counter the insurance lobbyists by taking the truth to the American people," said Dority.
Until recently, Dority was president of the United Food & Commercial Workers (UFCW), a union whose members have been in the forefront of the battle to protect health benefits on the job. This past winter, tens of thousands of grocery workers were forced into bitter strikes in California, Ohio, Kentucky and West Virginia, in an effort to hold the line for workers across the nation whose health benefits were under attack. Dority didn't blame the employers -- he blamed the system. In March, he announced he was stepping down at UFCW "to devote my energies to a new effort to convince our political leaders that health care for all Americans is long overdue."
BENTONVILLE, Ark. (October 6, 2004) - Wal-Mart Stores here said it plans to open 240 to 250 new supercenters in the fiscal year beginning Feb. 1, 2005, including conversions of approximately 160 discount stores. With 1,650 supercenters open to date and more expected to open before the end of the fiscal year, next year's expansion will put the company close to 2,000 supercenter locations. In other expansion plans for next year, the company said it expects to open 40 to 45 new discount stores; 25 to 30 new Neighborhood Markets; and 30 to 40 new Sam's Club locations, of which 20 will be relocations or expansions of existing units. Wal-Mart also said it expects to open 155 to 165 units overseas. The company also said it expects to build three new food distribution centers and three new general merchandise distribution centers.