The Philadelphia Inquirer
October 19, 2003
crisis augurs U.S. conflict
health-care costs are at core of strikes
ANGELES -- Major labor strikes that
erupted last week against grocery stores and the public-transit agency
here suggest that workers are increasingly willing to stop work over the
spiraling cost of health care.
Negotiations broke down over employers'
attempts to pass on part of the double-digit increases in health-insurance
premiums. And with costs showing no sign of retreating, more strife is
expected across the nation.
"It is the single most vexatious
bargaining issue now," said Peter J. Hurtgen, head of the Federal
Mediation and Conciliation Services. "Employers and unions can't
control costs. They can only argue and push back and forth about who
absorbs those costs."
The transit strike, called Tuesday by
maintenance workers at the Metropolitan Transportation Authority and
joined by the agency's other unions, has stranded nearly half a million
bus and light-rail passengers, clogged roads, and hurt the mostly
low-income workers who rely on public transportation.
Southern California's three largest
grocery chains were crippled last weekend when workers struck at Safeway
Inc.'s Vons stores. Two other large chains, Albertson's Inc. and Kroger
Co.'s Ralphs Supermarkets, then locked out unionized workers. About 70,000
workers at 859 stores are affected.
Bracing for 'a long strike'
The stores have remained open using
managers and replacement workers, but their parking lots are largely empty
except for picketers, and customers are crowding into competing stores
unaffected by the strikes. "We are bracing ourselves and our
temporary workforce for what could be a long strike," John Burgon,
president of Ralphs Grocery Co., wrote to employees Wednesday.
The number of strikes in the United
States has fallen dramatically in the last decade. Last year, the Bureau
of Labor Statistics counted 19 work stoppages at companies employing a
thousand or more workers, down from 35 a decade ago. But the health-care
crisis could change that.
"Health-insurance costs seem to be
the No. 1 issue right now in contract negotiations, and probably the No. 1
reason people are going on strike," said Forrest S. Briscoe, a
professor of labor studies and industrial relations at Pennsylvania State
University. "There's a sense that once you begin with cost-sharing,
it's a slippery slope."
The grocery industry alone is girding
for multiple strikes across the country over the issue. About 90,000
members of the United Food & Commercial Workers union are on strike
against stores in California, West Virginia and Missouri. Workers are
preparing for walkouts in Arizona, and in cities such as Memphis. The
major grocery contracts in the Philadelphia area will expire in 15 months.
"Every strike in the past decade
has been over health-care issues," said Greg Denier, a Food &
Commercial Workers spokesman. "It's a growing problem. The system is
collapsing. More and more employers are abandoning their employees,
shifting millions of dollars in costs on them."
Workers paying more
Last month, the Kaiser Family Foundation
reported that U.S. workers were paying 50 percent more for
health-insurance premiums than they were three years ago. The survey said
two-thirds of large employers increased what employees pay for health
insurance this year and that half planned increases next year.
Real wages declined in five of the last
eight months, reflecting how higher health-benefit costs are cutting into
The number of people with no insurance
also is increasing. The Census Bureau reported last month that 43.6
million were not covered last year, up 5.8 percent from 2001.
The transit-agency talks broke down over
attempts by the MTA to rein in health costs of the Amalgamated Transit
Union. Until last year, the MTA contributed $1.4 million per month to the
fund for 2,500 maintenance workers. Those costs have risen to $1.9 million
per month and the fund is insolvent, according to the union.
Transit workers now pay no premiums for
their insurance, $3 a month to cover a spouse, and $6 for a family.
The MTA said it was willing to bail out
the health-care fund and would increase its monthly contributions over the
life of the three-year contract, but only if the union surrendered control
of the fund, which the agency says the union has mismanaged. The union
"It doesn't make sense to keep
putting money into a fund that is heading toward bankruptcy," said Ed
Scannel, an MTA spokesman.
The grocery strike represents more of a
comprehensive management attempt to roll back costs by allowing stores to
institute a two-tier system that would provide less insurance to new
employees. They would receive full coverage after 7,800 hours of
The stores also want employees to pay
premiums of up to $15 a week for families. They now pay no premium.
"We're simply asking that our
employees share in some small cost of the coverage," said Brian
Dowling, a spokesman for Safeway. "Up until now it's been for
Analysts say the grocery-store industry
is particularly susceptible to rising health-care costs. Unionized workers
typically get modest wages but generous health benefits. Because health
insurance is a greater proportion of overall labor costs than in other
industries - the average is about 20 percent - grocery stores are
especially susceptible to double-digit increases in insurance premiums.
And with low-cost leader Wal-Mart Stores
Inc. moving into the grocery business, owners of traditional chains are
struggling to hold on to market share.
"Grocery stores have basically seen
the future by looking at the other companies that were run over by
Wal-Mart," said Mark Hugh Sam, equity analyst with Morningstar Inc.
"It's a low-growth, consolidating industry, and the only way to grow
profits is to cut costs."
Grocery-store workers in Southern
California say they have given up wage increases in recent years to
preserve health benefits; they regard the store owners' demands to cut
benefits as a betrayal.
"A lot of people work at grocery
stores more for the benefits than the pay," said Ellen Anreder,
spokeswoman for six of the seven locals on strike. "It's almost a
social contract we've had with our employers to maintain the
Union leaders say they have agreed in
the past to efforts to contain costs and had signaled willingness to
cooperate on some issues, but they were unprepared for management's
"We have solutions to the problems
if they're willing to work in a cooperative situation," said Greg M.
Conger, president of UFCW Local 324 in Orange County, which represents
13,000 striking workers. The union managed to settle two of its last three
contracts before they expired, and last went on strike in 1978.
Picketers at a Ralphs grocery store in
Garden Grove say that not all customers sympathize with their cause - some
tell the strikers they should be happy they have any insurance at all.
"We are willing to make copayments
if we have to, but they're talking about taking away everything,"
said Alba Goens, 39, a bakery store manager and mother of three who earns
$13.97 an hour after nearly 20 years with the store.
Goens is particularly concerned about
health benefits. She was diagnosed with thyroid cancer last year and
underwent surgery, paid for by insurance. She is undergoing therapy; she
had another round of radiation treatment on Monday.
"Why work all those years for
nothing?" said Goens, whose husband is a Web page designer and
intermittently employed. "Why invest all those years for
She said she was willing to stay out for
the long haul. "I'll be here as long as it takes - unless I have to
go to the hospital."
Inquirer staff writer Karl Stark
contributed to this article.