SoCal Lockout and Strike, Part Two?
Oh no, its déjà vu all over again.
Back in late 2003 and 2004, a lockout and strike involving 60,000 grocery workers in Southern California and the Safeway, Ralphs and Albertsons chains resulted in losses and resentment still felt today.
By the time a new labor deal was agreed to in 2004, the chains lost an estimated $1.5 billion in sales and Southern California consumers found other stores where they could buy their groceries.
The grocery workers involved in the dispute had little to show for their support of the job action. In the end, workers represented by the United Food and Commercial Workers (UFCW) wound up with a two-tier system that pays new hires less and provides them with less generous benefits than workers employed prior to the lockout and strike.
With all this as a backdrop, grocery chains in Southern California and their employees are moving closer to another negotiation, as the current deal expires in March.
While both parties are apparently seeking to avoid the harsh rhetoric of the past, there is no denying that tensions exist.
Greg Conger, president of UFCW Local 324, told the Long Beach Press Telegram, “It is the intention of union members to take back much of what was taken from us. I know we can’t get it all back. We don’t expect to get it all back. But we are going to take back as much of what was taken as we can.”
Jim Hertel of Willard Bishop Consulting said there are lessons for the chains from the previous lockout and strike. The chains lost business because the length of the dispute put consumers in the position of having to look for other grocery options, he said.
“If something happens that changes their patterns, now you’ve given the shopper the opportunity to try something that they may not have tried before,” Mr. Hertel said.
One thing appears clear – consumers are in no mood for another lengthy dispute between the chains and employees.
Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., offered this insight: “It’s interesting when you go out and say, ‘Oh, by the way, in March there will be grocery store contract negotiations.’ You get a general chorus of groans.”
Discussion Questions: What were the lessons learned by the chains and UFCW from the 2003/2004 lockout and strike in California? How will that experience
color the next round of negotiations between the parties?
As I said in a recent letter to the editor in my local paper after the Long Beach, CA city council passed an ordinance to prevent Wal-Mart and other mass merchants from bringing in Supercenters: “It is time to accept that check-out clerk is not going to be a lucrative lifetime career in the 21st century. This is evidenced by the fact that our local Ralph’s has begun the process of replacing their cashiers with self-service check-out machines.”
We have studied employee unions for 35 years. Unions and the grocers might seem to be very different organizations, but in fact they are quite similar: both of them are governed by highly defensive, highly controlling, highly autocratic Master Systems. Ironically, the basic processes that result in the conditions the unions are fighting here are the same processes that run the unions. This sets up an endless conflict between these two groups that cannot result in truly positive outcomes. The grocers’ and union’s struggle is just a small example of the hostile approach American society uses to solve so many of its conflicts. This is completely unnecessary. There are answers here, but not in how this is currently being done.
Chances are no one has learned anything. And if they’ve been watching election ads where the ‘other guy’ is always a thief and a scoundrel they are already programmed with lack, anger, distrust and paranoia.
It’s all evident in this article already. Right after claiming that no one wants negative rhetoric we read about one side determined to “get it all back.” We’re in a take-oriented world and it’s killing us.
The Universal Law of Reciprocity and the 9th of my “11 Commandments for an Enthusiastic Team” is “Whatever you want…give it away.” As counter logic as it may at first sound, it is irrefutable in marriage, our businesses and in labor negotiations. When hell becomes very cold maybe we’ll finally learn how the world works.
By failing to organize the major nonunion supermarkets, the UFCW is sowing the seeds of its own destruction. The UFCW doesn’t have to organize every Wal-Mart, Trader Joe’s, and Target in the country. They just have to organize a few in California. One at a time. Not even all of them in California. The UFCW needs to show it can be successful at any organizing campaign. A long journey starts with the first step.
If all major grocers are union, it’s easier for the supermarkets to pay everyone union wages and benefits using a single tier. When all the auto factories were union and all the airlines, all the employers were solvent. Now that many airlines and auto factories are nonunion, the union employers are financially disadvantaged. So they ask the unions for givebacks.
Why not offer to narrow the tier differences in the union contract if the UFCW organizes some of the nonunion players?
It’s an old story like “Groundhog Day” with the same results. Only slowly but surely Unions are losing ground. An attitude of “we are going to take back” isn’t winning them any kudos. The problem is Unions have no alternative, as their situation is one of perpetuation – they can’t give in or they disappear.
There’s no good ending to this for the Supermarkets. The smaller chains such as Trader Joe’s will continue their growth and the Unions will slowly kill off their only source of funding. It’s simply a free enterprise system of market forces winning the battle.
Since we are located in Southern California I’ve been regularly called on by the local media for comments and observations during the 2003/2004 grocery strike. The issues at that time for the regions leading grocery chains were reducing labor costs and competing with the growing threat of Wal-Mart Suoercenters. In 2007 the issues will be exactly the same.
Yes, there were some painful lessons for everyone involved, but the UFCW still does not understand that operating a business in today’s environment is vastly different than when they were getting wage and benefit increases with every contract during the 1980s and 1990s. The UFCW was very unhappy with the fact they had to accept a two-tier hiring program after the last strike and are planning to try and get that overturned on their next contract. During the last strike the union lost hundreds of members as they had to get other jobs during the lengthy strike. Many of those workers never came back to the union or to work in the stores. I don’t think they can afford that same mistake again.
There is an old saying “when you got nothing, you got nothing to lose.” The worst that can happen is they will lose their low wage retail job. Retail workers, union or not, don’t have a heck of a lot to look forward to even if they got what they wanted. When it comes down to it, they are making a big fuss on what amounts to just a few thousand dollars a year in wages and benefits. Maybe it’s time to opt into a different career.
What, for crying out loud, are the unions actually doing for their members other than artificially propping up higher-than-market wages and assorted benefits?
Why is it justified that, because a union is involved, the employer must pay $17/hour for a $10/hour job? Especially when the employer, in order to have customers for the union members to serve, must sell their products at nearly the same price as the guy next door who only has to pay $10/hour for a $10/hour job.
Ms. Miller’s quote is so precisely on point. While check-out clerk might be a life-time career for those who decide to stop there, it was never designed to be a lucrative career.
Mr. Conger, President of the UFCW Local 324, like his Vampire-like union counterparts in the airlines, auto makers, UPS and so on think that by digging their fangs deeper into the juggler vien and sucking out MORE blood will somehow have no effect on other parts of the body they depend on.
Shall we compare Southwest Airlines and bankrupt Delta? Thriving FedEx and struggling UPS?
For these poor union companies, it must be like swimming while pulling an anchor.
The only long-term hope for unions is in the public sector where free market forces are less in play and the public foots the bill with little choice in the matter (i.e. – teachers unions, postal workers unions, etc.).
There is no long term hope for free market unions because over time, they will systematically kill off any business they’re involved with.
The conversation seems to have turned from specific implications for retail grocery in Southern California to a debate on the necessity of unions.
I would agree with those who say that another strike would be disastrous to the retailers; probably again, the same big three.
Unions have less to lose, because the members either accept a wage they can’t live on, or they fight. The retailers will see their sales once again transfer to Costco, Trader Joe’s, Whole Foods, and (presumably) Stater Bros. if they repeat their stance from last time.
I would disagree with most on the necessity of the unions. They came into existence for a specific purpose–protecting employees from the abuse of employers. And if anyone thinks it wouldn’t happen again, look at WM and their issues with some of their store supervisors forcing employees to work off the clock as an example. Unions were also created to allow a decent living wage–not a “get rich” wage. Non-union employers pay a “Stay-at-home-and-live-with-mom-and-dad” wage, or the “I’m-retired-and-bored-and-Medicare Part B-won’t-cover-all-my-meds” plan. Either way, the dissolution of the unions shrivels the middle-class and widens the gap between rich and poor–which is where this country was before there were unions.
Meanwhile, the argument is that the wages need to be lowered to compete with non-union retailers. I don’t believe this is true at all. Stater Bros. has low prices compared to its unionized competitors. Why can they compete? Why does H-E-B do well? Perhaps it’s because multi-millionaire Wall Street analysts can’t force their privately-held managements to make poor short-term decisions that would give huge gains to publicly-held company CEOs, board members, institutional investors and others with large stakes, in effecting an outcome that benefits the already-rich.
Perhaps the privately-held CEOs realize that a few million a year is fine, and they don’t need an extra dollar an hour from each of their employees so they can get $17 million a year before driving the company into the ground.
I would agree that unions have become worthless in the sense that they provide no training, thus not differentiating the quality of the employee from a non-union employee, and I think this is a huge shortfall of the current union leadership.
Long term, happy, healthy employees can make or break the success of the retailer. They are the face the customer meets. If they are unhappy or rude, then the retailer will suffer. While union membership and a decent living wage will not guarantee this, neither will making the CEOs, analysts and institutional investors richer and happier.
The unions should get rid of their own dead weight, the chains should be happy to pay one set of their employees a wage that allows them to at least afford their own apartment, and everyone should stop using non-union shop pricing as a red herring.
Finally, I think it’s about time we all started asking why anyone deserves to be paid millions of dollars a year to run a public company. Most just do an average job.