Northern California Contract Continues Concessions in Grocery Industry

Shortly after the New Year, members of United Food and Commercial Workers Local 588 in Northern California ratified a new contract that will insure the continued decline of organized labor in the grocery industry. Perhaps no other union is as adept as the UFCW at making concessionary contracts look like a good thing. The assault on wage and benefit packages by grocery employers has been going on for years, with no end in sight.

What is particularly devastating for Local 588 members is their local leadership’s suggestion that this settlement is some kind of “good deal.” Hailed as better than Southern California’s recent concessionary package, the fact is this contract will place a huge strain on both pension and health plans that will be felt for years to come.

LOCAL 588 THE KEY

From a historic perspective, the union’s nifty repackaging of the concessions tracks a pattern used in the past.

In the business, these are called “revenue-neutral settlements.” In reality, they mean workers make less, as employers get relief that allows for higher profits, all at the expense of the workforce. Take, for example, Local 588’s three-year deal. The lowlights are pretty clear:

• The first-year increase will be a contract ratification bonus (only payable if the contract is ratified with no problem) and only payable to those hired prior to July 17, 2004.
• On October 9, 2005, a lump sum bonus of $.25 per hour for hours worked in the previous 52-week period will be paid only to workers at the “thereafter rate” (top of the scale).
• In the final year of the agreement, workers who have achieved the thereafter rate will receive a $.25 per hour increase.

‘GREATEST CONTRACT’?

In exchange for this “generous” offer, employers were able to get several adjustments to what Local 588 President Jack Loveall called the “greatest contract in the United States”:

• Pay scales were changed to dramatically increase the amount of hours a worker needs to put in before reaching the highest rate.
• Expanded duties have been given to rack jobbers and lower classification employees, thereby reducing hours available to UFCW members at higher wage rates.
• Major changes in the health care plan will push huge first-dollar payments on members for doctor’s visits. The co-pays on prescription drugs are substantial. Retirees will now pay $70 a month for health coverage.
• Employer hourly contributions for health care are reduced by more than $1 an hour and capped for the life of the agreement.
• Pensions were cut significantly. New hires will have different rules for qualifying for retirement benefits and there are exemptions as to whether an employer has to make a contribution.

These changes will almost certainly damage attempts to build the kind of solidarity necessary to battle the employers in three years, when the contract is up.

Worst of all, the locals failed to provide ample information about the benefit plans. With the use of the mail ballot, members have to rely on the packet mailed to them.

BLIND LOYALTY

It appears members ratified the contract based on several key factors.

The local was promoting the settlement as not having two tiers. While this can be debated, it is clear the package is a concessionary deal that benefits the employer greatly.

Also, it was no coincidence that members received the vote package the day after Christmas. Holidays are the busiest time of the year for retail workers, and the post-holiday time off with family members is cherished. With votes having to be back by January 6, workers had virtually no time to get much-needed answers.

There is a good chance the offer would have passed even if presented a month earlier, given the ugly battle in Southern California. But the real tragedy lies in Loveall’s decision to forgo any concerted effort with other locals to reach a fair settlement.

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It should surprise no one at Local 588 that the leadership has been aloof. Loveall has a long history of questionable actions and typical business-union dealings. What is odd is his decision to step down as this package was sent to members for ratification. Apparently the fact that the local will remain run by a family member—his son, Jacques Loveall—makes it tolerable.

Perhaps even more destructive than the settlement itself is the UFCW International’s failure to step in and assist members who raised concerns about the contract. Members have been pleading with International officers to flex their muscles and use their union’s 1.4 million members to stop the current trend of backwards bargaining.

No such help was to be found, as the plea to stop voting until members’ concerns were clarified was never even answered.

The potential to coordinate bargaining among all the UFCW locals with expiring contracts into one national action has been looming since last year’s failed strike in Southern California. UFCW members and leaders in the San Francisco Bay Area, Chicago, Las Vegas, Denver, Sacramento, and Hawaii are all facing similar concessionary offers.

INTERNATIONAL STRATEGY?

Suggesting that the International has decided there will be no more ugly strikes sounds like a conspiracy theory. But the question has to be raised: why hasn’t there been a national effort to use the clout of 1.4 million members?

A continued assault on UFCW members’ wages and benefits across the United States and Canada seems likely. The employers have been smart enough to do it a piece at a time.

The UFCW appears to have gone into a survival mode—one that insures they will be around to collect dues and keep the union machine up and running. Though Jack Loveall retired, the UFCW International pension fund will provide him more than $170,000 a year.

The UFCW appears to have no long-term strategy for survival; leaders have done little to prepare the membership for these fights as they have clung to their failing business-union model.

The emergence of Wal-Mart and other non-union grocery retailers has added to these problems. While it’s easy to attack those outside entities, it is more important for leaders to look at their own failures.

Organizing retail workers should have been their priority. The UFCW members had wage and benefit packages that far exceeded what other non-union retail workers labored under. Unfortunately, the boys running the show were more interested in preserving the status quo.

Bill Pearson is the retired president of UFCW Local 789. He has helped to advise Concerned Members of Local 588, a rank-and-file reform group.