In a region with ever-increasing living costs, supermarket
mega-chains must not allow investors to pressure them into cutting
health benefits and pay for their workers.
Seventy thousand unionized Southern California workers are
picketing Ralphs, Vons and Albertsons because those companies have
said they cannot offer existing levels of compensation or benefits
in the next union contract. The stores claim that competition is
forcing them to cut labor costs, but corporate leaders should
remember that a functional business model should allow workers to
earn a decent wage and receive health care.
Certainly, there is evidence of growing competition. In a move
that must worry existing stores, Wal-Mart plans to open 40
“SuperCenters” which would carry groceries and compete
directly with supermarket chains. Analyst Andrew Wolf was quoted by
the Investor’s Business Daily as saying Wal-Mart’s
non-unionized wages are on average 25 percent lower than union
wages of other chains.
Competition might be increasing, but union workers are right to
be angry. Even under the existing contract, a career clerk raising
a family cannot earn more than $17.90 per hour, while the starting
union wage is about $6. Without overtime, this means that even the
highest paid cashier earns about $36,000 a year. For career
workers, this is hardly enough.
According to a union official quoted in the Los Angeles Times,
workers may be asked to cover 50 percent of doctor visit and drug
costs, and may also begin paying a premium of $780 per year to
extend coverage to their families. For workers earning $36,000 or
less per year, these new costs could quickly add up.
The corporate officers of supermarkets should avoid copying
Wal-Mart’s disgraceful treatment of workers. Not only are
Wal-Mart’s wages 25 percent lower, but, according the the
United Food and Commercial Workers union, Wal-Mart makes workers
wait up to two years to receive insurance, gives them deductibles
of up to $1,000, and refuses to pay for some common shots and
exams. Considering the already low pay of these workers,
Wal-Mart’s practices are clearly unfair.
According to the union, Albertsons, Ralphs and Vons have had
profits increase 91 percent in the last four years. Thus, even if
claims of a 50 percent rise in health care costs are true, the
companies’ profits are still rising more quickly than their
health costs. This profit margin obviously does not ensure that
Wal-Mart cannot undercut established supermarket chains. But the
leaders of these chains must ask themselves if they wish to remain
competitive by cutting into the livelihoods of the workers who make
their stores’ operation possible.
As with all wage battles, there are two sides to the debate
““ investors and owners who worry about the bottom line, and
workers who worry about their standards of living.
In a state as expensive as California, workers must be paid a
living wage ““ even if that wage is higher than the pittance
paid on average to blue collar workers in other states. Until
supermarket owners can actually prove their businesses are drowning
amid the competition, they should ensure that union wages and
benefits reflect the hard work done by their employees.