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Working In These Times

Wednesday, Jun 11, 2014, 6:20 pm

Booming Business, But Falling Wages, in California Grocery Stores

BY Bruce Vail

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On Sept. 5, 2013, Californian UFCW workers joined a rally against Walmart's low wages, which they say drive down standards across the food retail industry. (UFCW Western States Council / Facebook)  

A new report on California’s grocery industry confirms what supermarket employees and labor union officials have known for years: Namely, that while the state’s retail food business has grown and prospered over the last 20 years, real wages for the sector's estimated 383,900  workers have actually fallen, forcing a growing number of those workers into poverty.  

The report, commissioned by the United Food and Commercial Workers International Union (UFCW), comes from the Food Labor Research Center at the University of California, Berkeley, and is co-authored by the center’s director, Saru Jayaraman (best known as a co-founder of the Restaurant Opportunities Center United), and by UC Davis Professor Chris Benner. Titled “Shelved: How Wages and Working Conditions for California’s Food Retail Workers Have Declined as the Industry Has Thrived,” the report is said to be the largest of its kind, relying on surveys of nearly 1,000 California grocery workers and a thorough analysis of data from the U.S. Census Bureau and the Bureau of Labor Statistics.

The retail food industry includes grocery stores, specialty food stores and variety stores such as Walmart and Target that stock significant amounts of food.

One startling statistic is that the median hourly wage (measured in 2010 dollars) of grocery store workers fell from $12.97 in 1999 to $11.33 in 2010, a decline of 12.6 percent. As a result, the proportion of food retail workers earning poverty-level wages increased from 43 percent in 1999 to 54 percent in 2010, the report found. Some 20 percent of the workers surveyed earn so little that they are unable to afford sufficient quantities of food for themselves or their families—a fact that Jayaraman calls “shocking.”

The reason for commissioning the report, according to UFCW Western States Council Executive Director Jim Araby, was to establish a base line of reliable statistical information as the union pursues its legislative goals in Sacramento. For example, he explains, the union is pushing the California legislature to include automatic cost-of-living increases in the statewide minimum wage, a measure that would prevent more low-wage workers from falling into poverty. “The public should be aware of what they are being asked to pay for,” Araby tells Working In These Times. “The low-wage model of retailing means that too many workers have to turn to public assistance, like food stamps or MediCal. The taxpayers have to pay for that, but there are public policy options that would put more of this cost on the employers, where it belongs.”

The release of the report comes about a week after some 60,000 UFCW members voted to ratify a new contract covering the three largest supermarket chains in Southern California. The terms of the new contract are regarded as a success by union officials, Araby says, but nevertheless do not go far to mitigate the effects of the long-term trends in the grocery business laid out in the report. For instance, while the new contract will provide a 30-cent-an-hour wage increase for senior workers at the three stores, this will not necessarily offset inflation and cost-of-living, he says. In fact, he notes, a new state law to raise the minimum wage to $10.00 an hour starting in 2016 will actually do more to raise the general level of wages throughout the industry. Legislative fights like the minimum wage are a necessary part of collective bargaining strategy, he continued, because isolated contract victories, while necessary, are not effective in raising the overall standards of an industry that also has a lot of non-union companies. “When we fight these minimum wage fights in Sacramento, the union is representing non-union [grocery] workers as well as UFCW members,” Araby says.   

Despite the anti-worker trends in the industry, the report finds that it is still better for workers to be in a union:

The responses of California food retail workers surveyed for this report demonstrate that despite declining standards in recent years, having a union still provides significant advantages in wages and working conditions. Unionized workers were far more likely to report earning wages above the poverty line and receiving promotions than non-unionized workers. Unionized workers also reported having paid sick days at almost double the rate of non-unionized workers, and were more than twice as likely as non-unionized workers to have a lunch break mandated by law.

Real wages of unionized supermarket workers have declined over the 20 years covered by the study, Araby allows, but the UFCW has been successful in protecting many worker benefits, particularly health insurance. But fighting to preserve these benefits has been costly over the years, he says, diverting resources away from wages or other benefits.

And there is continued danger to existing healthcare coverage as government officials work out the details of implementing the Affordable Care Act (ACA) or Obamacare, the report warns. In particular, the Obamacare provision that requires employers to provide health insurance coverage only for employees who work more than 30 hours a week presents a problem in the food retail business, which relies heavily on part-time workers. “Several food retail stores, including Walmart, Target and Trader Joe’s have already dropped health plans for employees working less than 30 hours a week. ...The workers most vulnerable to reductions in work hours linked to ACA implementation include those working 30-36 hours a week, with incomes below 400 percent of the federal poverty line and a lack of job-based coverage,” the report notes. Without affordable job-based coverage, these retail workers must turn to publicly financed assistance programs, at significant cost to taxpayers, Araby emphasizes. 

Jayaraman notes that even though the non-union Walmart has a market share of only around 3 percent of the California grocery business, the Walmart model of low pay and minimal benefits is still driving down conditions throughout the industry. Araby agrees, explaining that the fear of Walmart is rampant among unionized food retailers, and the Walmart threat is often used to justify lower wages and benefits. “This speaks to our strategy to lift up the whole industry through action in Sacramento,” he says. “There can’t be any progress if our [unionized] companies have to compete with other retailers who are dumping their legitimate labor costs on the public.” 


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Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA's Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper's New York City headquarters and in the Washington, D.C. bureau.

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