Workers Battle With Grocery Chains Over Obamacare Implementation

Bruce Vail

UFCW Local 21, UFCW Local 367 and Teamsters 38 bargained with representatives from major supermarkets, including Kroger, to keep their health benefits.

Unions representing about 30,000 grocery workers in the Puget Sound region claimed a victory last week in a labor contract fight that centered on the implementation of Obamacare in the area’s biggest supermarket chains.

Western Washington state locals of the United Food & Commercial Workers (UFCW) and the Teamsters have been bargaining for months with representatives from Kroger, Safeway and Albertsons, all among the largest supermarket chains in the country. In addition to the elimination of health insurance coverage for 8,000 part-time workers, the initial demands from the grocery retailers included extended wage freezes and selective elimination of overtime pay, according to Seattle-based UFCW Local 21. The workers were within hours of beginning a strike before a last-minute deal was reached on October 21.

I started working in the grocery business over 40 years ago. The proposals we saw this time from employers were some of the worst I’ve ever seen. They tried to turn us into Wal-Mart. They did not succeed,” commented Local 21 President Dave Schmitz in a formal statement issued at the end of the ratification vote October 25

Though union representatives like Schmitz are declaring the deal a victory, in reality, the ratification is only a partial success for workers. In Seattle, part-timers were not cut from insurance eligibility, as Kroger and the other chains had demanded, and no new healthcare costs were imposed, says spokesman Tom Geiger. But contract gains on wages were modest,” Local 21 says, and other negotiating achievements were limited to beating back demands for sweeping concessions. For their part, the grocers maintained that the deal preserved good wages, secure pensions and access to quality, affordable healthcare for [their] employees.”

Beginning Jan. 1, 2014, Puget Sound grocery workers will earn wages ranging from $9.42 an hour for newly hired checkout clerks to $19.50 for the highest-paid meat-cutters and other experienced food specialists, Geiger says. In keeping with a historical pattern in the area, this hourly rate for lowest-paid workers is 10 cents more than the state’s minimum wage (Washington currently has the highest minimum wage in the country at $9.19 and hour with a scheduled rise to $9.32 at the beginning of 2014). Rather than a general wage increase in the contract’s first year, each union member will receive a bonus payment based on the number of hours they worked over the last year. In the second and third years of the three-year contract, most union members will get a straight wage increase of 25 cents an hour each year.

But other potential improvements in wages or other benefits are being sacrificed, at least in part, in exchange for companies footing the rising bill of the existing health plan, the union reports. The grocery chains currently pay $4.38 for each hour worked by a union member into the health fund, with that figure rising to $4.86 over the life of the contract. That increase is expected to pay the costs of maintaining the health insurance plan at its current level of benefits for the next three years. Local 21 and UFCW declined to comment further on contract specifics, though Schmitz’s statement acknowledged that the unions did not get everything they wanted.”

Because the Affordable Care Act requires many companies to pay more for employees’ healthcare, grocery worker unions across the country are facing stiff concessionary demands as their employers make the transition. Early this year, New England UFCW locals reached an uncomfortable compromise with the large Stop & Shop grocery chain that was similar in some ways to the Seattle agreement. In that case, UFCW agreed to eliminate healthcare eligibility for some part-timers, but only on the condition that the supermarket company provide financial and legal assistance in obtaining similar healthcare coverage from other sources for the dislocated workers. And similar contract struggles still under way in New York, Cincinnati, Baltimore, and Washington, D.C. show that union leaders nationwide are facing unusually heavy pressure as grocery chain corporations frequently try to cut their own costs at the expense of healthcare for employees.

In an October 28 message, Tony Speelman, lead negotiator for New York’s UFCW Local 1500, acknowledged that Obamacare has presented unprecedented challenges” to workers and corporations alike. However, he said, Local 1500, which is now in negotiation for a new contract with Stop & Shop, came to the bargaining table in good faith understanding that we would have to make changes to our health fund to be compliant under the legal requirements of [the Affordable Care Act].” 

And, as he points out, there’s no reason for companies to take the law’s passage as an opportunity to cut workers’ benefits. Stop & Shop seems to think [Obamacare] is an opportunity to achieve three goals: increase their profits, pick their employees’ pockets and undermine the union contract. That type of irresponsible bargaining will only lead to three conclusions: a work stoppage, unnecessary inconvenience for their customers and devastating economic damage to hundreds of New York communities.” In general, he continued, Obamacare was not passed with the intent of eliminating an employer’s responsibility to provide affordable and comprehensive healthcare to its employees.”

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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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