President's Perspective
by Ron Lind

Grocery Division Members: We're Getting Ready

While our Union is highly diversified with members in many industries ranging from wholesale meat and non-food retail to barbers, cannabis industry workers and others, the overwhelming majority continue to work in retail food stores. When contracts are set to expire for our approximately 25,000 members working in those stores, much of our energy and attention must naturally shift to the task of assuring success at the bargaining table. That time has come, and we’re getting ready.

The stars were aligned for us in 2007. A strong economy, healthy companies, our recent merger, union solidarity and a sound bargaining strategy resulted what is still seen as the best contract settlement for grocery industry workers in North America.

While our foresight in negotiating a four, rather than a three-year deal was a positive move, we are now faced with one of the most challenging bargaining environments that I have seen in my thirty-two year career as a union representative.

With the exception of Safeway, our largest employer and the only national company that we deal with, our union represented employers are facing difficult economic and competitive pressures and in some cases, are struggling to survive. Taking advantage of the ongoing financial crisis and lots of vacant stores previously occupied by the likes of Mervyn’s, Circuit City and others, low-wage, low benefit non-union companies are expanding in Northern California at an alarming pace. And while we continue to battle and slow the growth of the giant non-union enemies like Walmart and Fresh and Easy, they are adding market share as well. And, thanks in large part to Republican obstacles to economic growth and a turn-around in the employment situation, consumer spending continues to be negatively impacted.

Our ongoing pension funding challenges and the flat-out attack on unions and the working class by the Tea Party and other right-wing wackos who control the House of Representatives and many State legislatures are factors as well.

While these issues and others are problematic, they are overshadowed by our greatest challenge - the cost of health care. While health care reform was a good idea and may eventually lead to a better health care delivery model, the short-term result has been added cost to our plan. The math is pretty simple. Unionized grocery employers in Northern California pay a little over $6 an hour for every hour that you work in to our benefit plan. For us to maintain our existing plan without change would require that the rate increase to more than $8 an hour over the next two years. Even if we could get the employers to agree, it doesn’t leave much if anything for other needs including wages. And don’t forget that the hourly cost for Walmart and other non-union retailers is closer to $2 an hour at best. Clearly, this issue will be the driving force in our 2011 negotiations.

We’re working on a number of strategies to meet the challenge. The UFCW locals have already introduced cost-containment measures to the fund that have saved millions of dollars without reducing benefits. While some of them, like the dependent eligibility audit were unpopular, they are absolutely necessary and much better than the alternative. There is more to come. Disease management programs, wellness concepts and other alternatives will help us mitigate costs while ultimately making members healthier.

There is much more work to do and it will take place at the bargaining table later this year. Initial signals from the employers indicate that not only are they unwilling to see their health care costs increase, but that they want to dramatically reduce them. That is an unreasonable concept that we will quickly and firmly dissuade them of. We are already seeing this play out in Southern California where the very real threat of a strike is on the horizon.

While we and our employers continue to face the most challenging economic environment of our lifetimes, the fact is that the majority of groceries in Northern California continue to be sold at traditional stores. And the vast majority of those stores are covered by UFCW contracts with relatively the same labor costs.

We stand ready to work with the employers to continue to deal with health care and other contract costs in creative ways that minimize the impact on our members and our retirees. We may have to restructure our benefit plans in ways that shift some of the costs to those members and retirees, particularly those who choose not to participate in health management and other cost-saving programs. But if the employers make the mistake of trying to take advantage of tough times by over-reaching and attempting to undermine the hard-won union advantage that our members enjoy, we will resist with all of the resources that we have.

In the coming weeks our contract communication and member involvement plan will begin to roll out. We’ll be combining traditional strategies with new approaches based on technology and social media, including on-line surveys, virtual meetings, Twitter and so-on. The common denominator is you - and your willingness to stay informed and get involved. Let’s get to work!