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Contra Costa Times, July 23 2004
SAN FRANCISCO - If the grocery contracts approved after a 139-day
strike in Southern California were extended to unionized stores throughout
the state, as much as $293 million in health care costs would be shifted
from employers to California taxpayers by 2007, according to a study
sponsored by the United Food and Commercial Workers.
Supermarkets responded that the study, conducted by the UC Berkeley
Center for Labor Research and Education, is based on faulty assumptions
and say its predictions are not borne out by similar contracts long
in place elsewhere.
The study, "Wage and Health Benefit Restructuring in California's
Grocery Industry: Public Costs and Policy Implications," comes
just weeks before a coalition of UFCW unions representing 35,000 Northern
California grocery workers are expected to begin their own contract
negotiations.
Coalition representatives have repeatedly said they will not accept
the two-tier system approved in the Southern California contract,
which provides lower wages and benefits to new hires, while requiring
them to pay higher monthly health care contributions and wait a longer
period before becoming eligible for health care coverage.
Local union leaders have long claimed such a system threatens to push
supermarket workers into poverty. But it would also come at a significant
public cost if approved in the Bay Area and elsewhere in the state,
according to the study, to which the UFCW contributed $5,000.
Assuming annual turnover rates of up to 58 percent, waiting periods
of one year or more for single health care coverage and 30 months
for family coverage, and higher monthly contributions that might discourage
some workers from joining employer health care plans, between 33 percent
and 53 percent of unionized workers would not be covered by the grocer's
health plan by the end of the contract in 2007, the study claims.
"Over a quarter of those workers will be able to switch to their
spouse's plan, just under a quarter will enroll in a public health
care plan, Medicare or Healthy Families Program, and almost half will
just simply go uninsured," said Arindrajit Dube, a co-author
of the study, along with Alex Lantsberg.
By 2007, he said the use of these tax-funded health care options will
result "in at least $66 million and up to $102 million in annual
statewide costs passed on from the employers to the public at large."
UFCW Bay Area Coalition spokesman Ron Lind said the conclusions demonstrate
the broader public significance of the upcoming grocery negotiations,
and acknowledged that conveying such was part of the motivation for
sponsoring and publicizing the study.
"It appears that a battle may be looming, a battle that our communities
and taxpayers have a stake in," he said.
Pleasanton-based Safeway Inc. spokesman Brian Dowling challenged the
credibility of the study, and said it exaggerates grocery industry
turnover rates as well as the number of workers who would forgo health
care coverage.
"It's unsurprising to me that a union-sponsored study would reach
a conclusion that supports the union position on a two-tier wage structure,"
he said. "What is surprising is that the union would fund and
publicize a study that's critical of the very same contract that the
union itself has approved, ratified and recommended" in Southern
California and elsewhere.
Dowling said that none of the predictions in the Berkeley study have
come to pass in other areas with two-tier systems, including more
than 40 states and Washington, D.C., where such a system has been
in place since 1984.
Safeway and other grocers have repeatedly said they must cut wages
and benefits to counter skyrocketing health care costs and the growing
threat of non-unionized discount grocers like Wal-Mart, which has
become the nation's No. 1 grocer in just over a decade. Wal-Mart plans
to open 40 grocery-selling supercenters in California over the next
four years.
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