10/27/2003

 

Grocery Strike

 

If you follow the news you know there's a strike going on by grocery workers at stores in Southern California. The dispute involves Safeway, Vons, Albertsons, Kroger, Ralphs, and Frys stores, and is also an issue here in Arizona and other states. As of this writing Arizona workers aren't on strike yet, but their contract will have just expired about the time this is printed.

 

In the free market system there is always pressure to push the wages of the lowest-paid workers down. Where there are no unions or minimum wage laws the lowest workers literally get just enough to not starve. Adam Smith, the patron saint of the free market, said so, it is proven out in nations around the world, it was common in this country less than a century ago, and it is still true wherever it can be gotten away with, such as those who employ illegal immigrants.

 

The labor pool has to be looked at globally. While the job of bagging groceries can not be shipped overseas, the job of making grocery bags can. So when the former employee of the bag plant is out looking for work and having to accept lower wages, that puts downward wage pressure even on the jobs that stay here.

 

The only thing that offsets this pressure is unions and laws such as the minimum wage. The economy in the US changed dramatically from the late 1800s to the 1950s. In the 1800s we had the robber-barons, the huge difference between rich and poor, child labor and all the rest. In the 1950s we had a narrower gap between rich and poor and generally better jobs for the middle and working class. Unions, and labor victories such as the minimum wage, played an enormous role in this healthy change. That's why supporting unions is important.

 

In this strike the companies are asking the workers to accept large reductions in health coverage, to pay more for the remaining coverage, accept concessions on pensions, and reduced pay for new hires. The workers are willing to agree to a small part of this. The companies are blaming the need for this on the threat of Wal-Mart selling cheaper groceries. There is some truth in this. Wal-Mart is such a huge employer that it largely sets standards, and it has managed to fight off unions. What really needs to happen is for Wal-Mart employees to unionize. But in Southern California Wal-Mart has 1% of the market compared to 60% for these grocery chains combined, and the chainsí overall profit and productivity-per-worker have gone up significantly in the last few years.

 

Personally, while I used to give a significant portion of my grocery budget to one of these local stores, I'm shifting all I can to other stores, and I've written the big chain to tell them why. If the strike gets settled in favor of the workers I'll re-evaluate. If we actually have picket lines here, I won't cross them.

 

If you'd like more information you can go to www.ufcw.org, the site of the United Food and Commercial Workers. I tried to find information on the stores' side of the story, but they have put out nothing informative in press releases or on their web pages that I could find, other than quotes from executives that reducing labor costs is how they intend to boost their bottom line. I take this to mean they're not disputing the union's facts.

 

Tom Cantlonís column appears every other Monday. www.tomcantlon.com