Southern California retail labor contract nears expiration date
Southern California retail labor contract nears expiration date
On March 5, the contentious retail clerks contract signed three years ago between the United Food & Commercial Workers union and the three major Southern California grocery chains expires. As of Feb. 21, there was no word on the status of the current negotiations.
In 2004, the three major chains -- Vons, Ralphs and Albertsons -- took a hard negotiating line, which resulted in a 21-week strike and a labor contract very much weighted toward management. The retailers were able to forge an agreement that created a two-tier pay and benefit system greatly reducing benefits and wages for new hires.
Retail consultant Dick Spezzano said that the retailers were looking to cut their overall labor costs as they tried to compete with non-union food outlets such as Wal-Mart, Costco, Trader Joe's, Whole Foods, Wild Oats and a host of independents. On the surface, it appears as if the retailers were successful, as their respective labor forces have turned over as much as 50 percent during the life of the contract. That means nearly 50 percent of their employees are being paid less wages and less benefits than before the strike.
Mr. Spezzano said that each retailer would have to do its own cost analysis to determine if it has truly cut its labor costs as a result of the new contract and to what extent. While those retailers are paying less collectively per hour for their workers, there would typically be lost productivity with a workforce that has much less experience.
In any event, that contract will soon expire, and the union is trying to win back some ground lost in 2004. The UFCW has already come to terms with two Southern California-based retailers -- Stater Bros. and Gelsons -- signing contracts in the last month that are said to eliminate the two-tier approach. Mr. Spezzano said that terms of those separately negotiated contracts have not been released, but on the surface that would appear to be a union win.
This time around, UFCW is negotiating separately with each of the three major retailers. Mr. Spezzano said that there has been no news about the progress, but he believes it would appear to be in the best interests of both sides to reach an agreement without a strike.
The five-month strike was devastating to the workforce and also cost the retailers tens of millions of dollars in lost business. Some have opined that many of the individual stores have still not fully rebounded from the effects of that strike. Today, the Southern California retail scene is even more crowded than it was three years ago due to Wal-Mart opening additional stores and a number of ethnically oriented independents that have added stores.
Union leaders and retailers throughout the nation are closely watching these negotiations because the 2004 contract served as a template for the rest of the United States. Since then, retailers have routinely asked for two-tier contracts, though they have rarely, if ever, signed a contract as heavily weighted toward management as was the Southern California deal.
In 2004, the three major chains -- Vons, Ralphs and Albertsons -- took a hard negotiating line, which resulted in a 21-week strike and a labor contract very much weighted toward management. The retailers were able to forge an agreement that created a two-tier pay and benefit system greatly reducing benefits and wages for new hires.
Retail consultant Dick Spezzano said that the retailers were looking to cut their overall labor costs as they tried to compete with non-union food outlets such as Wal-Mart, Costco, Trader Joe's, Whole Foods, Wild Oats and a host of independents. On the surface, it appears as if the retailers were successful, as their respective labor forces have turned over as much as 50 percent during the life of the contract. That means nearly 50 percent of their employees are being paid less wages and less benefits than before the strike.
Mr. Spezzano said that each retailer would have to do its own cost analysis to determine if it has truly cut its labor costs as a result of the new contract and to what extent. While those retailers are paying less collectively per hour for their workers, there would typically be lost productivity with a workforce that has much less experience.
In any event, that contract will soon expire, and the union is trying to win back some ground lost in 2004. The UFCW has already come to terms with two Southern California-based retailers -- Stater Bros. and Gelsons -- signing contracts in the last month that are said to eliminate the two-tier approach. Mr. Spezzano said that terms of those separately negotiated contracts have not been released, but on the surface that would appear to be a union win.
This time around, UFCW is negotiating separately with each of the three major retailers. Mr. Spezzano said that there has been no news about the progress, but he believes it would appear to be in the best interests of both sides to reach an agreement without a strike.
The five-month strike was devastating to the workforce and also cost the retailers tens of millions of dollars in lost business. Some have opined that many of the individual stores have still not fully rebounded from the effects of that strike. Today, the Southern California retail scene is even more crowded than it was three years ago due to Wal-Mart opening additional stores and a number of ethnically oriented independents that have added stores.
Union leaders and retailers throughout the nation are closely watching these negotiations because the 2004 contract served as a template for the rest of the United States. Since then, retailers have routinely asked for two-tier contracts, though they have rarely, if ever, signed a contract as heavily weighted toward management as was the Southern California deal.
