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A Watershed Strike

Strike against supermarket chains is a fight for all working-class people.
The Nation
October 23, 2003

A Watershed Strike
by Kelly Candaele & Peter Dreier

The strike of 70,000 Southern California retail food workers, which started on October 11, may be the first in a series of battles that could ultimately shape the future of labor-management relations throughout the United States.

The United Food and Commercial Workers (UFCW), one of the nation's largest private-sector unions, has geared up for what could be a prolonged job action. "If they break our backs here," noted Sean Harrigan, UFCW States Council director, "they [employers] will view this as an opportunity to pillage UFCW members and their union contracts throughout the country. This is a real watershed." The last strike in the Los Angeles retail food industry occurred twenty-five years ago.

The employers--Vons and Pavillions, Ralphs and Albertsons--want to slash the health and retirement benefits of their cashiers, baggers, deli clerks and other employees. The companies' representatives refused to discuss the details of their contract proposals, but according to UFCW Local 770, the grocery chains have demanded what amounts to a 50 percent reduction in workers' medical coverage, including increased prescription drug costs and cuts in retirement benefits. Additionally, the companies want to initiate a "second-class" wage system, with new hires doing the same work as current employees but for much lower pay.

The companies claim that high labor costs make it impossible for them to effectively compete with nonunion stores like Wal-Mart, but a quick look through the public records shows all three companies to be highly profitable: The Cincinnati-based Kroger Co., which owns Ralphs, is the nation's eighteenth-largest company, with revenues of more than $51 billion. Albertson's, Inc. based in Idaho, ranks thirty-fifth, with revenues of $36 billion. Safeway, which owns Vons and Pavillions, and is based in Pleasanton, California, ranks forty-first, with revenues of $32 billion. The three chains' combined operating profits increased from $5.1 billion in 1998 to $9.7 billion last year.

More than 11,000 members of UFCW Local 770 (which represents food workers in the Los Angeles area) showed up at a rally two weeks ago. More than 97 percent of them voted to reject the company's offer--an incredible show of solidarity. Local 770 president Rick Icaza remarked after the vote that "In my decades of work for the union I have never seen an employer offer so soundly rejected." "I'm absolutely convinced," Icaza added, "that this is really a start of greater worker militancy."

A few days later, the LA City Council unanimously voted to support the strikers. In fact, the UFCW can expect a great deal of support from both local and statewide Democratic leaders. Elected officials have often helped mediate labor-employer tensions so they didn't spiral into destructive battles. But with the recall of California Governor Gray Davis, speculates UFCW's Icaza, "Employers may feel stronger because there won't be a pro-labor governor breathing down their necks."

From labor's perspective, the national food chains' demands for draconian cuts reflect a profoundly altered corporate attitude. When local billionaire Ron Burkle, philanthropist and Democratic Party contributor, owned Ralphs before selling the company in 1998, labor negotiations were characterized by an attempt to solve problems rather than defeat the "opponent." "It was a win-win situation with Burkle," the UFCW's Harrigan says. "Now it's win-lose."

Historically, enlightened corporate leaders have understood that a "high road" economy--one that promotes improving workers' skills, provides good wages and benefits, and better productivity--strengthens the overall social and economic health of the nation. Henry Ford, while no friend of unions, knew that his workers had to make enough money to buy the cars he was producing.

Companies like Wal-Mart, the nation's largest retailer, with 1,397 supercenters, accounting for 19 percent of the nation's grocery sales, which is attempting to make inroads in Los Angeles and other urban areas, symbolize the "low road" corporate strategy. They rely on part-time workers, pay low wages without benefits, resists unions and outsource as much production as possible to sweatshops in Asia and Latin America. If Vons, Ralphs and Albertsons succeed at mimicking the Wal-Mart approach, it will pull down America's middle-class standard of living and signal other companies, whether unionized or not, that it's time to go to war against working families.

If the employers succeed in dismantling the foundations of the collective bargaining agreement in Los Angeles there will be dramatic national ramifications for the UFCW. Ten thousand UFCW members in St. Louis are currently on strike, and the UFCW locals in West Virginia, Ohio and Kentucky walked out against Kroger stores on October 13. The UFCW union contract in Arizona with Safeway ends on October 25, and agreements in Indiana, Memphis and Denver are also about to expire. The strike fund in Los Angeles is paying out millions of dollars a week, and spokespersons at the UFCW national headquarters in Washington, DC, said recently that they would re-mortgage their national office building to help finance what could easily become a nationwide strike.

The union is counting on the power of consumer support and negative publicity to pressure the companies to repeal their demands for dramatic cuts in benefits. The UFCW has mobilized an impressive show of support among community and religious institutions, whose leaders are encouraging consumers not to cross strikers' picket lines. The Teamsters union--whose members drive the trucks that bring food from farms, factories and warehouses to supermarkets--has pledged support for the striking workers. And at a recent gathering of labor leaders in Los Angeles, Miguel Contreras, head of the Los Angeles Central Labor Council, pledged support for the UFCW.

The first week of the strike went well for the workers, as the vast majority of customers have decided to shop elsewhere. Like during the successful 1997 United Parcel Service strike, the shoppers know the checkers, baggers, deli clerks and meat-cutters by name, so are less likely to fall for company propaganda excoriating the "greedy union."

A nationwide UFCW strike over healthcare could make that issue a central one in the upcoming presidential campaign. With more employers cutting benefits, the number of Americans without healthcare is growing. This is the Wal-Marting of America, and the labor movement and other progressive groups should be pushing the Democratic candidates to explain how they will provide universal health coverage for all Americans. A recent government census report concluded that the number of Americans without health insurance increased by 2.4 million people between 2001 and 2002. In 2002 there were 43.6 million people, or 15.2 percent of Americans who have no health coverage.

But in addition to bolder political engagement, labor needs more creative strategies to fight the corporate trend toward the "low road" economy. For instance, the California Public Employees Retirement System (CALPERS) has $145 billion in assets and is the largest public pension fund in the nation, while the California State Teachers' Retirement System (CALSTRS) has close to a $100 billion portfolio. These two funds, through indexed investments, own part of virtually every large corporation in the United States, including the three supermarket chains.

While the primary responsibility of retirement-fund board members is to make investment decisions based on anticipated returns, it is counterproductive to society to invest in companies engaged in fierce assaults on workers'--and the nation's--living standards.

In Canada, several public-investment funds have balanced their investment responsibilities to their retirees with broader social goals which benefit all of society. As part of their investment policies, they require a "social audit" to assure that no funds go to companies with deleterious health and safety, environmental or employment practices. If California's pension funds had similar standards, companies like Vons, Ralphs and Albertsons could be denied investment capital when they tried to push their employees off the healthcare rolls. As stockholders in big companies, union pension funds could also wage campaigns to elect pro-worker company directors.

If this strike is a long one, the potential for civil unrest will undoubtedly increase. When strikebreakers are taking their jobs and workers see their family security going down the drain, rage is an understandable reaction. But before law enforcement officials and journalistic pundits engage in their obligatory condemnation of "conflict," they should consider the damage being done to the lives of the working men and women who are now walking picket lines rather than checking groceries and bringing home a paycheck.

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Counter 16.Nov.2003 01:47

Punch mikey2_2003@yahoo.com

November 12, 2003

The California Grocery Workers Strike

The Wal-Mart Distraction


We are in the midst of the largest labor struggle since the UPS workers went on strike in 1997. In the late evening of October 11th a strike was called by the United Food and Commercial Workers (UFCW) against Vons and Pavilions (Safeway). Their "competitors", Ralphs (Kroger) and Albertsons immediately responded by locking out all of their unionized workers.

By the early morning of October 12th, 70,000 grocery workers in Southern California were walking the picket lines. These workers are fighting for their livelihood and they need our support. These three multi-billion dollar supermarket chains, who are currently crying poverty, earned over eight billion dollars in net profit in the last five years alone. That would have been impossible without the hundreds of thousands of workers who make their stores run.

The companies claim that since Wal-Mart is moving in to the supermarket business they have to cut their costs in order to compete. They are trying to divide the working class by claiming that the grocery workers are overpaid. If we are to believe the companies it seems every grocery worker is making about seventeen dollars an hour. But the vast majority of grocery workers are part-time, and the average worker is taking home about $1,300 a month. One of the main victories these workers have won over decades of struggle is a decent health care package.

However, the contract that has been offered by these multi-billion dollar chains is an insult at best. The proposed contract could cut health benefits by fifty percent, cap wages at $14.90 an hour for new employees (after six years of service!), and even attacks the health benefits of those who have already retired. One of the main goals of this contract is to institute a two-tier wage system. This would mean everyone hired under the proposed contract would be on a different wage and benefit scale than those already working there. Obviously, the company would then try to find any pretext needed to fire the older workers in order to reap hundreds of millions of dollars in added profits with their new low-wage workforce. The goal of these companies is to institute a l! ow-wage and benefits workforce similar to the one that exists at Wal-Mart.

But in the end this fight is about more than the grocery workers of Southern California, it's about the working class fighting to hold onto the gains they have won over one hundred years of struggle. This is not a simple dispute between supermarket employees and their employers. A line has definitely been drawn in the sand; all the employers are on one side and all the employees are on the other. These companies have joined together in an act of corporate solidarity. They know which side they're on in this war; the question is which side are we on?

Think about it, multi-billion dollar corporations who are supposed to be in "competition" with each other have joined together to try and crush their employees. They would rather lose tens of millions of dollars a week in the short term in the hopes of stealing hundreds of millions from their employees in the long term. This is not someone else's fight; we all have a stake in it.

If the workers win it will show the employers that they can't count on slashing wages and benefits in their never-ending demand for higher and higher profit margins. But if the employers win, this will have severe consequences for workers everywhere. Who will be next on the list? Worse yet, who will fight back if it is seen as a lost cause? Real wages have been falling in this country since 1973. In the same time period inequality has grown and corporate profits have soared. During the "booming 90s" and in the years since, we have witnessed startling productivity rates while wages have either remained ! stagnant or have fallen. Recently we found out that the U.S. economy grew at a rate of 7.2% rate for the third quarter. Yet more and more people continue to file for unemployment. We've also seen a net job loss for three straight years, the first time that's happened since the Great Depression. What does it mean that the economy is growing while jobs are being lost left and right? It shows us that employers are squeezing more and more out of the workers who still have jobs.

There comes a time when people will not take any more beatings, when they dig in their heels and refuse to give another inch. That's what we're witnessing in the grocery stores of Southern California. This fight really could be the turning point. It could be the spark that lights the fire, when workers across the country say "enough is enough". Already supermarket employees across the nation are ready to strike to keep their benefits, MTA workers in LA are on strike, teachers in Chicago a prepared to strike, even restaurant employees in two of the most exclusive restaurants in New Y! ork City are on strike to keep their health benefits.

The grocery workers are not isolated; they are 70,000 representatives of the working class who have stood up to say we're not going to take it anymore. They need to know that over a hundred million other workers are standing behind them. This isn't the first time we've seen regular working folks take the lead in fighting for basic human rights such as health care. The eight-hour workday, the elimination of child labor, unemployment insurance, and social security were victories won by organized labor and we shouldn't forget that.

There are those who say that in times of economic trouble everybody needs to give in a little. But in a country where the 400 richest individuals are worth $955 billion dollars I think what we need is a little bit more taking by those on the bottom.

What is needed now is some good old-fashioned solidarity. The grocery workers need to know they are not alone. This is not their fight, this is our fight. Let's let them know that we believe with all of hearts in that old labor slogan that an injury to one is an injury to all.

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Michael Schwartz is an activist with the Los Angeles Strikers Solidarity Organization  link to www.geocities.com