The grocery store strike in Los Angeles County is only a harbinger of things to come. There are at least two strikes in LA for which healthcare is the key issue, and there are many smaller worker struggles in which the price of healthcare is central. The grocery story strike is primarily one of healthcare and the union members are being slandered daily in the LA Times by the ads the chains are running. Let’s take a look at their arguments.
First myth: WAL MART is killing the chain groceries. This myth is based on Wal-Mart’s announcement that it will open 40 hybrid grocery and general merchandise Supercenters in Southern California over the next several years.
Truth: By Wal-Mart’s own press release, when completed those stores will control about 1% of the area’s grocery market.
Second myth: The economy is hurting margins. Just look at the stock price, down so much even though the market has rallied. Look at the employment figures. All those out of work people are spending less on necessities.
Truth: Southern California has actually been adding jobs at a rate above the national average, many of these due to war spending, so crucial to this region dependent on military contractors. The three dominant chains-Vons, Albertson’s, and Ralph’s- taken together, have seen profits increase 91 percent over the past five years. Two and half of those years were recessions. The real danger is that military spending will not be sustainable.
Third Myth: Health Insurance rates are so high, the company can not absorb the increases. As result, we must shift this burden on to the employee.
Truth: UFCW grocery store baggers start at $6 per hour. The most experienced workers who oversee departments make about $17.90,. The average wage is between $12 and $14 per hour, according to the UFCW. An increasing number of these workers are not allowed to work a full 40 hours.
Compare this with the executive compensation of Safeway, the parent of Vons and Pavillions.
Safeway’s president, chairman and CEO Steven A. Burd received $1,000,000 in salary in 2002. His bonus was a paltry $258,000.
To put this into perspective, the company says workers must pay $15 a week for family healthcare insurance (or $60 a month). If Mr. Burd were to accept only half his 2002 earnings and assuming he could find some way to live on $600,000 a year. He could pay the healthcare expenses of 873 workers’ whole families for a full year.
Now, Safeway executive VP Larree M. Renda made $674,000 in salary and bonus for 2002. Vasant M. Pabhu, Executive VP and Chief Financial Officer made 1,173,000 in total compensation. Richard W. Dreiling and Bruce L. Everette, both also Executive VPs made over $650,000. Lawrence V. Jackson, Senior VP, made $627,000.
If each of these executives took the same 3% from their salary, 158 employees’ entire families could have health insurance. Keep in mind, not all these employees need healthcare for a family. For single workers, a 3% pay cut in these executive salaries would cover 438 workers. A 50% pay cut in Mr. Burd’s salary could pay healthcare for 2419 single workers.
Now, asking these executives to live on 3% less is unreasonable. It is far too modest. And there are surely many other management level executives who could afford a 3% pay cut with hardly blinking.
It seems to me that if business competition was hurting profits-which it clearly is not-there would be less to actually manage. You could easily cut a few executives from the payroll.
Baring this, however, there seem two solutions. Universal healthcare, which is responsible for longer life spans in Europe, would take this issue off the shoulders of workers, at least in terms of contract negotiations. Strikes over health insurance about which at least two are going on in LA County would be unnecessary, though taxes would be needed to cover the new program. A progressive tax to cover the program could easily be set up in which workers paid 1% of their salaries for universal healthcare while executives paid say 3%
Even better would be legislation that required company executives to cut their salaries by some reasonable level before cutting the wages of workers. Sounds ridiculous, I know, but in Japan this sort of thing happens without legislation, simply out of custom.
STANDARD SCHAEFER is free-lance journalist and working writer in Pasadena, CA. He teaches in the Graduate Writing Program at Otis College of Art. He can be reached at email@example.com.