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Unions falter in fighting benefit cuts

Sacramento Bee, May 4, 2012

 By Dale Kasler

Pushed to the margins of the U.S. economy, labor unions like the one representing Northern California's grocery workers are engaged in an epic struggle to preserve their members' wages and benefits.

For the most part, they're losing.

Union members across America still enjoy higher pay on average than their nonunion counterparts, but the gap is shrinking. Organized labor is under persistent pressure to make concessions. Diminishing membership also has eroded union power.

The United Auto Workers gave ailing Detroit automakers $1 billion in cuts. Pilots at American Airlines learned last month their pay and benefits could get reduced substantially. Even California's powerful public employee unions have given ground in recent years.

And in the biggest labor battle the Sacramento region has seen in years, Northern California's three union supermarket chains — Raley's, Safeway and Save Mart — are pushing for concessions on health care and other issues, arguing they need to cut labor costs to compete against Wal-Mart and other nonunion stores.

The situation neared the boiling point this week with Raley's. The West Sacramento grocer ended negotiations and vowed to submit its "last, best and final contract offer" to the United Food and Commercial Workers. That could lead to a strike.

Raley's backed off somewhat Thursday, saying it wants both sides to meet with a federal mediator. "I want to make sure we take the extra effort to give negotiations one last chance," said Chief Executive Michael Teel.

The UFCW wouldn't commit right away to mediation, saying it hadn't heard directly from Raley's. Jacques Loveall, president of Local 8 in Roseville, said Raley's decision "is a reflection of the solidarity our members are demonstrating."

In reality, both sides are vulnerable, and both have reason to fear a confrontation, said Ken Jacobs, chairman of the Center for Labor Research and Education at the University of California, Berkeley.

Raley's is already struggling, and "a strike could be devastating," Jacobs said.

Neither can the union afford "to push Raley's off a cliff" by striking, Jacobs said, since that could ultimately cost workers their jobs.

"It has an impact on how much the union can achieve," Jacobs said.

Few unions are immune to the pressure to accept concessions, particularly in a difficult economy. That's true even for public employees, a remaining stronghold for union membership. More than half of all union members in America are now government workers.

California's public employees, who have considerable influence over Democratic elected officials, have escaped wholesale benefit cuts sought by Republicans. But they have compromised on issues such as overtime pay, employee contributions to pensions and paid holidays. And their ranks have been thinned, especially at the local level, by layoffs.

Concessions have been steeper in the private sector, where competition is fierce, firms are struggling and nonunion alternatives abound.

For instance, the UAW in 2009 suspended dental care, agreed to cutbacks in drug coverage and made other concessions to help keep U.S. automakers from going under. The concessions, totaling $1 billion, were made as part of the federal bailout of the industry.

Even in a growing field such as telecommunications, cost pressures can be relentless. Verizon workers went on strike last summer rather than swallow $1 billion in concessions. They went back to work after two weeks even though the contract remains unsettled.

It becomes hard for unions to protect wages in "industries that have alternatives, where you have companies with lower prices," said David Smith, a labor economist at Pepperdine University. "Markets are just becoming more and more competitive."

Smith said union workers make about 15 percent more, on average, than nonunion counterparts in the same occupations. The gap is considerably higher in some industries, like construction, according to federal data.

In Northern California's union supermarkets, top pay is around $21 an hour plus benefits. The UFCW says Wal-Mart, the leading nonunion chain, pays half as well.

Yet, as the nonunion share of the grocery business has grown, the middle-class status of grocery workers who do belong to unions also has begun to erode. Workers hired after 2004 must work nearly four times as long as veteran employees to reach the top scale. All workers, particularly the new hires, pay considerably higher health care deductibles than before.

The result has been higher turnover, with fewer employees making a career of grocery work, according to a 2007 study co-authored by Jacobs.

"More of the jobs are part time, the workforce is getting younger," the Berkeley expert said. "A smaller percentage of workers have stayed the years you need to get to the higher pay and see it through to retirement."

With the grocery chains pressing for additional cutbacks, the union says it's trying to be sensitive to the companies' financial pressures. The UFCW also has mounted a public-relations campaign to persuade consumers to shop only at union stores.

Getting that message to resonate with the public can be difficult. Just 11.8 percent of America's workforce belonged to a union in 2001, according to the U.S. Bureau of Labor Statistics, down from 20 percent in 1983.

The slide reflects the nation's changing industrial landscape. Smith said the decline of American manufacturing has robbed the union movement of some of its most reliable workplaces.

Unions have made some gains. The Justice for Janitors movement, launched in the 1980s by the Service Employers International Union, has obtained contracts for thousands of janitors across the country.

The campaign had its big breakthrough in Sacramento in 1999 and now represents 1,200 janitors in the city.

But economic pressures remain: The contract with Sacramento's janitors expired Monday, and employers are pushing to scale back health care coverage, said SEIU spokeswoman Cecille Isidro.

One California union appears comparatively bulletproof: the California Nurses Association. Its members average nearly $90,000 in annual pay. It has the power to disrupt hospital operations by staging one-day strikes, as it did Tuesday at seven Bay Area hospitals operated by Sutter Health.

Smith said it's little wonder the nurses have so much clout.

"It's a highly specialized position," the Pepperdine economist said. "They go into that negotiation from a position of strength."

Original Article

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