Supermarket Workers' Union Fails in California

Once upon a time, strikes were a tool used by labor unions to advance the interests of their members and to extract higher wages and improved benefits. In recent decades, however, with unions on the defensive against increasingly aggressive corporations, strikes have morphed into an employer weapon. The massive four-and-a-half month labor dispute that just ended this week, affecting 70,000 workers from San Luis Obispo to the Mexican border, must be understood in this context.

Southern California's supermarkets have been unionized for more than half a century. Until last year, they were a poster child for "high road" management. Labor-management relations were cordial, and the industry had an unbroken record of labor peace going back 25 years. With all the major grocery chains under the same union contract, paying the same wages and benefits, competition was based on service and quality; not on squeezing labor. The happy result was that supermarkets were one of the region's few remaining sources of middle-class jobs with decent wages and benefits for workers without a college degree.

Last summer, however, Safeway, Albertson's and Kroger-the industry's Big Three-made a calculated decision to radically restructure their wages and benefits and, in effect, abandoned the high road. They demanded major concessions from the United Food and Commercial Workers Union (UFCW) when its southern California contracts came up for renewal in the fall. Among their many demands were a sharp reduction in employer contributions to the workers' health insurance plan, as well as a two-tier wage structure under which new hires would earn far less than their co-workers and receive vastly inferior health and pension benefits. As the companies knew perfectly well, no union worthy of the name could have accepted these concessions without a fight, and indeed the union declared a strike against Safeway (which operates as Vons in the Southland) on Oct. 11, five days after the old contracts expired.

Strikes are the equivalent of war in the labor relations arena, and the employers planned their offensive like a military operation. When the union belatedly decided to strike only the Safeway-owned stores, Kroger and Albertson's immediately announced they would lock their workers out. All three chains meticulously prepared for the conflict, hiring thousands of replacement workers well in advance of the strike deadline, obtaining commercial drivers' licenses for their managers, and even recruiting truck drivers who could replace any Teamsters who went out on sympathy strikes. They entered into a pact among themselves to share any profits for the duration of the conflict, an arrangement whose legality has since been called into question. Their public relations machines were well oiled for the occasion as well, pouring out endless newspaper ads and other messages to the public to create the impression that their demands were modest and reasonable.

The employers claimed they needed concessions from the UFCW because of competition from Wal-Mart, the nation's icon of low-wage retailing, which operates SuperStores in some parts of the country that have a significant share of the retail food market. But the Wal-Mart argument is less than compelling for the case of Southern California, since Wal-Mart has yet to open a single store selling groceries in this region. At best this was a threat on the distant horizon.

Why, then, did the grocery chains choose southern California as the battleground for their assault on the UFCW's long-established wage and benefits? Perhaps it was simply a matter of timing; the union contracts in this region were the first to expire when these giant national firms made the decision to join the race to the bottom. Or perhaps it was the fact that the southern California UFCW contracts were the best (from the union's perspective) in the nation, and covering the largest number of workers. If the union could be forced into a strike here, not only would the results set the pattern for the rest of the nation, but the union's treasury might be depleted in the process. Indeed the union spent a phenomenal $1 million a day during the strike, and after 139 days it simply lacks the financial resources to fight another day. The companies lost a huge amount of money too-$2 billion by most accounts-but for them this was an investment on which the future returns would be well worth the price.

Yet the Big Three didn't hold all the cards. No one anticipated the huge public support the picketers garnered when they suddenly appeared in front of the stores where virtually everyone in the region buys their daily bread. Very few people crossed the picket lines, largely because of the personal ties between customers and checkers. Public support was also fueled by the anxiety so many working people had about being forced to absorb more and more of the costs of health insurance at their own jobs (if they were lucky enough to be insured), for this initially appeared to be the main issue in the conflict. Many customers cheered on the supermarket workers' efforts to resist the trend toward employers forcing workers to absorb more and more of the rising costs of insurance.

Unfortunately, the UFCW failed to capitalize on the enormous public sympathy the picketers evoked. In retrospect it's clear that they did not realize the enormity of the challenge they were up against until very late in the process. Twenty-five years of labor peace left them poorly prepared for war. Their own members entered the fray with only limited information about the strike issues, and equally important, the union failed to communicate effectively with the wider public until several months had elapsed. The UFCW, as a traditional "business union," was not practiced in the innovative tactics that other unions have developed to effectively confront employers in a hostile political and economic environment. And sadly, the longstanding tradition in the U.S. labor movement of decentralization and local autonomy meant that the more savvy unions that could have unleashed such tactics were not invited to help until it was much too late.

As the strike and lockout dragged on, the employers proved intransigent, unwilling to consider more moderate offers of concessions from the union and unresponsive to repeated attempts to facilitate negotiations. Only after unfavorable quarterly profit reports generated a negative reaction from Wall Street, and after a desperate UFCW invited AFL-CIO veterans to launch more aggressive tactics and threaten to make the dispute national, did they finally begin bargaining in earnest.

When the parties finally reached a settlement last week, the union publicly declared victory. UFCW International President Douglas Dority, who retired just a few days later, went so far as to declare that this was "one of the must successful strikes in history." The union pointed to the fact that the settlement succeeded in preserving the established health insurance system for current workers for two more years, which was one of the central issues that led to the strike and lockout.

But in every other respect, the employers were the real winners here. They accomplished their primary goal, which was to impose a two-tier system that provides dramatically inferior pay, health insurance and other benefits for any workers hired in the region's supermarkets after Oct. 6, 2003 (the expiration date of the last union contract). Given normal turnover, in a few years, the majority of the workers in the region's supermarkets will be in the new, bottom tier-even if most of the 70,000 workers who struck or were locked out return to work. And store managers will have every incentive to accelerate this transition, since their labor costs will be so much higher for workers in the upper tier. The strike settlement will also become the template for future labor negotiations in the supermarket industry all over the nation, as regional contracts between "Big Three" grocery chains and the UFCW come up for renewal over the months and years to come. There may be ripple effects on labor negotiations in other industries as well.

The 2003-04 Southern California supermarket strike and lockout will be remembered as a turning point in corporate America's tragic journey down the low road, and as a huge defeat for the U.S. labor movement and for working people. One can only hope that next time, the unions will be better prepared for battle.

The writer directs the UC Institute for Labor and Employment and is a professor of sociology at UCLA.

© 2004 TomPaine.com

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