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Lost in the supermarket

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lost in the supermarketAll week, workers at my neighborhood Von’s have been wearing buttons that say, “No Concessions.” There has been a big sign outside the store, “Now Hiring.” Both management and workers were preparing for a strike beginning Saturday.

A supermarket strike is one of those events that, literally, hits close to home.

I visit my local Von’s almost daily. It’s more than a place to do weekly shopping. I stop by nearly every morning to buy a couple of apples and other snacks to take to work. I’ve lived in this neighborhood for seven years. I know just about every employee down at the story by first name on sight. And they know me.

So, I’ve been digging through news stories trying to get a sense of the issues that might drive the strike.

Some of the information I’ve found is contradictory, but here are a few stories.

Story #1
Hedy Klein, a longtime Ralphs employee, said she would be forced under the latest company health care proposal to pay $400 a month to keep taking an anti-cancer drug she said has saved her life, as well as pay a health care premium of about $750 a year.
Story #2:
One of the most contentious issues is company-funded health care. The most recent proposal would require grocery workers to pay $1,300 a year for family insurance premiums. Employees would also face increases in deductibles and co-payments for doctor visits, hospital visits and prescription drugs.

Albertson’s spokeswoman Stacia Levenfeld said this round of labor negotiations has been tough because of “skyrocketing rises in health-care costs,” changes in the stock market that have affected employee pension funds and an “influx of non-union competitors,” such as Wal-Mart.

“We have to make sure our cost structure is competitive with non-union competitors,” she said. “Our labor costs need to be contained. We offer extremely generous benefits, and we want to continue that . . . but they have to be in line with the economy.”
Story #3:
At issue in the UFCW talks are a number of economic matters, including moves by the grocery chains to freeze pension funding and have workers pay more for health insurance. The stores also want to install a two-tier pay system that would bring newer workers in at lower levels, and eliminate some pay differentials, such as those for working Sundays.
Story #4:
At the contract ratification/strike meeting held Thursday at Victorville’s Ramada Inn for members of Local 1167, Lathrop read salient features of the supermarkets’ proposal that he said would hurt workers.

Those features included weekly premiums for health coverage totaling $260 a year for individuals and $780 a year for families, and a 30-cents-an-hour wage increase for food clerks and meat cutters starting October 2005 — terms read out to loud groans and long sighs.

The supermarkets, though, say the proposed changes are crucial to remaining competitive in a world of low-cost, big-box retailers, warehouse retail stores, specialty stores and health-care costs that Albertsons spokesperson Stacia Levenfeld said have gone up by 50 percent in the past three years.

“We’re asking our employees to share in some of those health care costs,” Calderon said. “This includes $5 for individuals and $15 for families per weekly paycheck. To go from zero to $5 — they’re used to enjoying that generous benefit.”

Just how much are employees being asked to pay for health care insurance? If story #4 is correct, not that much. In fact, they’re being asked to pay what I pay, and I suspect that if you’re full-time in a non-union job, it’s about what you pay, too? In other words, at least on that one demand, what the chains are asking is not unreasonable.

My local Von’s workers tell me that they’re not asking for more money, but one story I read said they want 50 cents more an hour, while the chains are reportedly offer another 30 cents an hour. Frankly, under the circumstances, I think any offer of increased pay is pretty generous.

I’m sure there are more issues involved, but no California newspaper seems to be doing a particularly good job of covering this issue.

Now, you might think that because I fancy myself a conservative, I might be anti-union. I don’t consider myself anti-union at all. I fully support collective bargaining. In a capitalist system, all stake holders in the system, including workers, have a right and an obligation to seek through all legal means whatever economic advantage they can gain. Since unions are perfectly constitutional (right to free association), employees are perfectly free to band together and get for themselves the best pay and benefits they can muster.

That doesn’t mean, of course, that employers have any obligation to honor those demands. Employers enjoy every right to maximize their profits, and if they can successfully break a union — and one would assume that success includes not damaging their own business — then they have a right to do that as well.

An equitable collective bargaining situation only works if both sides have something to gain and something to lose and were ambition and avarice balance ambition and avarice. Unions would like us to believe: workers all good, corporations all bad. I don’t buy that for a minute.

For example, the California chains can see the Wal-Mart train a-comin’, it’s comin’ round the bend, and they’ve face increased competition again. Should the chains surrender all profitability just to continue giving employees a free ride on health care?

This morning my checker told the girl in front of me that the scabs (she didn’t use that word) who cross the picket line won’t make the advertised $17 an hour. They’ll only make $8 an hour because they won’t have much experience, if any. My only thought was, well $8 an hour is probably more than what Von’s will be paying clerks once they start to open up local stores. And you expect your employer to remain competitive in that environment?

Business is business. I’m all for employees getting as much as they can from employers, but there also comes an point when employees must realize that they have an ethical obligation to their employers. Employees are duty bound to help their employers maximize profits, stay in business and fight off competition. When I see employees wearing “no compromise” buttons I realize they just don’t get it, and they probably deserve to lose their jobs to non-union workers.

So will I cross a picket line during this strike? Yes. But not because of any sympathies with the business owners. I’ll cross because just like the chains, and just like the workers, I have my own economic interests to look after first. I’ll shop where I think I can get the lowest prices with the least hassle. And the thing the employees must realize is that if a year from now, that means driving 20 minutes south to shop at a Wal-Mart supermarket and save $100 to a $150 a month on my grocery bill, because Wal-Mart doesn’t pay union wages, then I’ll do it. My only obligation in this dispute is to my own pocket book. I imagine many other consumers feel the same way. Obviously, the chains understand that, but I don’t think the unions do.

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About Howard Owens

  • Dawn

    Isn’t that a Clash song?

  • Yes. Off of London Calling.

    As for Brian Flemming, I stopped paying attention to that trolling idiot’s logic- and fact-challenged rants many months ago.

  • kija

    The idea that by saving your pennies by shopping at Wal-Mart will benefit you in the long run is ludicrous. When unions lose, non-union workers lose as well. Because the higher wages and benefits paid to union workers encourages employers at non-union shops to increase their wages and benefits as well to retain workers. So, go ahead, save your pennies. But in the long run, you and your children will pay the price in lower wages for everyone down the road.

    Do people even remember what America was like before the union movement? There are many nostalgic employers waiting for the day. Every session some Republicans introduces bills to get rid of OSHA and repeal child labor laws. This year they tried to destroy overtime laws. Wake up. If your income is earned, the GOP doesn’t give a damn about you. They only serve those who live on unearned income.

  • unionboy

    yeah… I guess you don’t have much of a clue what it’s like to work a job that is union, but could be not- I mean you have never had to actually worry about food on your table… well, go on, save a few bucks, screw everyone else, and then retire and die. But remember- it’ll come back three fold

  • It’s capitalism, baby — you do what you have to do, I do what I have to do, and the business owners do what they have to do — and in the long run, everybody wins, because the competition and the ambition-vs.-ambition raises everybody’s boats. As I made clear, I have nothing against unions and believe workers have a right to collectively bargain — but it ain’t my fight. I do what I have to do and you do what you hve to do. I’m interested in this issue because it affects me directly, and I want to understand it better — as I said in my post — but based on what I’m seeing so far, I’ve seen no reliable information that tells me the union has a leg to stand on in this fight. And so far no commenter has given me any concrete, reliable (Brian Flemming being the exact opposite of reliable) information to tell me otherwise. So, Mr. Unionboy and Kija, flame me if you like, but you’re really not advancing your cause unless you can offer information that will educate me on the fight — with reliable links — that can pursuade me the union is right in this issue.

  • BTW: As for the anti-cancer drug comment — I’ve read dozens of stories on this issue, and I’ve only seen the “I’ll have to pay $400 (or was it $800) for my wife’s anti-cancer drug” quote ONCE. It’s not been repeated in any other story. And every other story says all the workers are being asked to pay is no more than $750 a year to help cover the cost of their health care coverage, with a normal co-pay … probably better than my co-pay. That offer is nothing but reasonable. I know plenty of people making $15 an hour or less (and wasn’t long ago such a person) who pay that amount or more. I realize it’s hard to make it in Southern Coastal California on anything less than about $30 an hour, but you can blame that on the anti-growth crowd, not the people who are trying to remain competitive while supply us with jobs.

    Let’s say the union wins this fight and get the exact contract they want — how happy are the workers going to be when Wal-Mart drives one of the chains out of business? Having a job at $15 with a co-pay is a damn sight better than no job at all.

  • This post is so full of greed it’s just sad. Sure everyone has to look after #1. But isn’t that what people now decry is wrong with society today? Novody wins when the businesses get everything they want. Unions and businesses could work together against insurance company greed (the state only has a marginal base-setting influence on rates) but instead the companies know they have all the power and can get anyone to fill most of these jobs. And since jobs are at a premium it’s that much easier. That’s not a partisan issue. It’s just the way it is. Looking after #1 is what happens when everyone feels screwed. Or greedy. Or uncaring.

  • And of course, unions are never greedy, right? And the union now isn’t being greedy at all by refusing to share the burden of rising healthcare costs?

    It is probably true that business and labor unions could cooperate on a broad range of issues to help both sides, but that isn’t the issue now, is it. The issue now is this particular contract.

    Where did I say, once, ever, that businesses should get everything I want.

    In fact, what I said was, “I don’t consider myself anti-union at all. I fully support collective bargaining. In a capitalist system, all stake holders in the system, including workers, have a right and an obligation to seek through all legal means whatever economic advantage they can gain.”

    And that isn’t greed. That’s common sense. Just as it’s common sense for me to look after my own finanical health. I have an obligation to my family, if not myself, to ensure I spend my money wisely. There are times and places for maybe being unwise in favor of social conscience, but not every company vs. union situation is one of those times are places. And up until somebody shows me where the union is ALL right and the chains are ALL wrong on this issue, I’m going put my own self interest ahead of either side.

    Don’t come here and mischaracterize my statements and expect to convince me of anything. Provide me with facts, links, solid argumentation.

  • HAR! recast that sentence … “Where did I say, once, ever, that businesses should get everything THEY want.”

    For the record — before you accuse me of some betraying mental slip … I don’t own a business, and I’ve never owned a business that had employees, and probably never will. I like being a worker bee.

  • I just want to say that I have had a turnaround on this issue.

    Howard Owens is right.

    I live in L.A., so I’m now suffering horribly from this terrible Greed Tantrum (aka, “strike”) by the $6/hr baggers and $15/hr clerks.

    I normally shop at a Vons here in L.A., but today to avoid crossing the picket line, I chose to shop at the local Big Nueve Supermercado.

    And it was HORRIBLE. I had to walk TWO BLOCKS FARTHER than I usually do. The prices are a bit higher, so I probably spent about THREE DOLLARS MORE on the total bill for my weekly groceries.

    And they didn’t have the Variety Pack of Quaker Instant Oatmeal, so I had to buy a box ENTIRELY FULL OF JUST ONE FLAVOR. Plus, the checker wasn’t very good at his job and screwed up the total the first time. So that was a GOOD TWO MINUTES of my life gone right there.

    I’ll never have those two minutes back. Ever.

    And then I had to walk another TWO BLOCKS MORE on the way home.

    I mean, I’m in pretty decent shape, but, come on–two blocks. On foot.

    God, it was horrible. It almost approached a MINOR INCONVENIENCE. No, I’m serious. It did.

    So, fuck those baggers and clerks. Company gonna cut your pay scale and your benefits? Well, boo-fuckin’ hoo, cancer boy.

    I am a Privileged White Fucking Male who has never had to contemplate a career serving others. I am the served, not the servant.

    I believe in charity. I believe in helping my fellow man and all that shit. But I will not be INCONVENIENCED just to help out those who fall below me on the ladder of success.

    I mean, how much can you ask? Inconvenience? Just to help you earn a decent living and your family have health care?

    Please. I am already devastated by the inconvenience of tonight’s shopping trip. I can barely type these words, so has the inconvenience stricken me. Not to mention those three dollars I’ll never have. There goes my retirement.

    No, I don’t think I’ll help you, six-dollar bag boy, or you, fifteen-dollar clerk. You’re just not worth it.

    Howard Owens, let us hold hands and skip across the picket line. That’ll show these greedy fucks.

  • So are any of the executives at Vons taking a pay cut, making a sacrifice?

    Just because Wal-Mart treats their workers like shit, should all workers accept that treatment?

    Just so you can save $1200 a year?

    You could probably save that more than that just by making dinner and eating out one less time a week. Or making your own coffee rather going to Starbucks.

    What people don’t seem to realize is as more and more local stores go under because of “competition” from Wal-Mart, Barnes & Noble, Amazon, etc. fewer and fewer people will be able to afford to buy anything.

  • Percy

    Howard, I’m with you…

    I make less per year, on a pension, than many of these grocery people make and have to pay $600+ PER MONTH, out of my own pocket, for HMO health insurance. I would love to pay &750 per year instead of $7500!

    Actually the 30c per hour wage increase would just about cover the increased health cost, but I guess they want their cake and eat it too.

    Also, for many of these workers, it’s the second income of a two income family and perhaps they are already covered by their spouses health insurance.

  • “Just so you can save $1200 a year?”

    First, in my view Von’s hardly qualifies as the type of small business appropriate for the Wal-Mart predator argument (and it’s not a bad argument).

    Second, perhaps if the combined levels of government didn’t take more than half of the income of so many people, they’d be more inclined to make a charitable contribution to the people who work at Von’s, which is basically what the $1200 remark suggests.

    Paying taxes and charitable giving/tithing don’t leave a lot for subsidizing those workers. And those workers are getting royally hosed by social security, while wealthy people can afford to pay S.S. and pay for real retirement plans.

    Assuming Von’s is public, if the executive compensation at Von’s is out of whack, the Board should fix it. Or the shareholders should step in–this is an area where I think the left has a point. If Von’s is private or closely held, they can do whatever they want.


    Third, the poster was trying to engage in a constructive debate. Attacking him and writing bad satire about how great you are because of where you shop (because, it’s all about the activist, after all) is fine and well, but it does nothing in the long run to help anyone.

    “I am a Privileged White Fucking Male who has never had to contemplate a career serving others.”

    We know you are, Brian, so stop griping about it and stop pretending that your malice helps anybody.

    Also, please give us a detailed breakdown of the benefits and wages given by this other supermarket.

  • Eric Olsen

    I am right in the middle on this: clearly we need unions or the employers have too much power. Clearly we need limits on the power of unions or their demands become unreasonable, set in bureaucratic stone, cumbersome and stifle growth.

    So the obvious answer is compromise and cooperation where it is possible.

    As for the consumer: there is no shame to maximizing your economic reach – stop pretending there is. But because this maximization causes casualties along the way, we need a safety net, and we need rules to keep the playing field even. We need balance. Neither side seems to realize this, which is fine for an opening bargaining position, but not helpful in the long run.

  • Just so you can save $1200 a year?

    Am I the only one who looks at $1200 as a pretty significant amount to save? Are all of you making so much that you can just throw away $1200 every year? Because if so, please throw it in my direction. I know I need it.

  • “Just because Wal-Mart treats their workers like shit, should all workers accept that treatment?”

    Maybe they shouldn’t, but if enough people do accept them and an even larger amount chooses to shop there, they have no choice.

    I support unions in a lot of situations, but without the compromise that Eric is talking about, they don’t work and everyone loses in the long run.

    For example, do you know why it became too expensive to produce steel in this country? Unions drove all their companies out of business with insane retirement plans and benefits.

    Now think about it realistically. If you are one of the employees of the Von’s, do you think the execs are going to cut their salaries? What model do you think they are going to look at to derive success? Wal-Mart maybe.

    If you were a computer producer and Dell had you beat by 25 bucks on every computer for a cost basis, are you going to give your employees a raise? No, you are going to keep wages steady and look for additional ways to cut costs.

    If you are Von’s and your competition is non-union, what are you going to do if you are running the company where you are measured primarily, if not exclusively on the bottom line? You are going to cut costs. In this case, they are not trying to go non-union which they have every right to do. Nobody gives them credit for not flipping the union the bird though.

    Union employees need to have an understanding of the business environment they work in. If they don’t like it, then they should use their skills at a different job/company, or gain new skills so their 40+ hours a week can be re-allocated somewhere else in the economy. Fighting the natural progression of the market is futile.

  • Reuters:

    Grocery store baggers covered by the UFCW start at $6 per hour while the most experienced workers who oversee departments make about $17.90, Andreder said. The average wage is between $12 and $14 per hour, she said.

  • Yes, I’ve been unemployed long enough to know $1200 is a lot of money. And I’ve also learned that it is possible to save more than that whether it is to make your savings last longer or in order not to support a company like Wal-Mart.

    The reality is people are spending more in the short term to support certain values which are more than worth it in the long term.

    I realize there are no mom and pop supermarkets left (with the rare exception like the Rainbow Grocery which is collectively owned here in San Francisco). But supermarkets with a union are better than Wal-Mart.

    And I do get things like get yogurt, bread and produce at a small grocery and meat and pasta at the Italian corner grocery.

    And just to demonstrate the contempt these stores show for their workers and customers, Albertsons and Ralphs are locking their employees out.

    Vons is owned by Safeway which is a publically traded company. Susan Faludi won a Pulitzer at the Wall Street Journal for her 1990 story on the human cost of the leveraged buyout of Safeway (I have a copy of it, so I’ll read it again).

    From executive paywatch:

    Steven A. Burd
    Chairman President and CEO
    Safeway Inc.

    In 2002, Steven A. Burd raked in $1,258,000 in total compensation including stock option grants from Safeway Inc.

    From previous years’ stock option grants, the Safeway Inc. executive cashed out $10,968,122 in stock option exercises.

    And Steven A. Burd has another $76,752,557 in unexercised stock options from previous years

  • I rarely eat out. We’ve been out to dinner twice in the last two months, and hadn’t been out to dinner in at least four months before that. We always cook at home. I rarely eat fast food, usually snacking on apples and popcorn through out the day.

    We don’t go to movies.

    I haven’t bought a new CD in months.

    My big luxuries are DirecTV with Tivo and about $15 a week in cigars (and I buy inexpensive cigars most of the time).

    If I can save another $100 a month on shopping, I’m going to do it.

    One of my favorite beverages is diet vanilla Coke. Why can the vendor at my work sell it for $1 a bottle and Von’s charges $1.19? Would union wages have anything to do with that? Would the low profit margins of Von’s have anything to do with that? Go ahead and cut Burd’s salary by 75 percent … I’ll still be paying $1.19 for a soda at Von’s, and the profit margin will not have improved.

    How are the unions any less greedy than Burd? Here they are using bullying, strong arm tactics to force their employers into giving them a contract that makes no competitive sense.

    And of course Ralphs and Albertson locked the employees around … they union is trying to use a divide and conquor strategy. Why should the chains roll over and let them get away with that tactic. If the unions want to play hardball, they shouldn’t whine when they get a high, hard one tossed back at them.

  • L.A. Times:

    Workers walking the picket lines at stores around the Southland said they were disappointed that things had come down to a strike, but they insisted that they were prepared to hold out for as long as it took to preserve their health care and pension benefits, which the companies are intent on rolling back.

    “I get paid 80 cents above minimum wage,” said Gina Guglielmotti, a floral clerk overseeing locked-out workers at a Pasadena Ralphs. “People just don’t realize what we’re fighting for. They think we’re ungrateful. But we want to stop the constant degression of wages.”

  • The fact that a bottle costs 19 cents more at Vons could have more to do with the advertising budget at Vons and satisfying Safeway shareholders. Or that Vons sells a lot more products, diet Vanilla Coke isn’t a huge seller and they don’t need to price it competitively.

    But go ahead, blame Canada er the union.

    Well, I knew Giants owner and former Safeway CEO Peter Magowan was a prick from the way he treated Dusty Baker (go Cubs!), but he comes off even worse in Faludi’s article.

    The first Safeway store was started by a clergyman who wanted to help his parishioners save money. The company mottos was “Safeway Offers Security” until the LBO when they fired 65,000 workers and changed it to read in part “Targeted Returns on Current Investment.”

    Faludi tells the story of the human impact of a few of the employees who were fired and some who remained in the changed company.

    It is collected in The Colossus: How the Corporation changed America edited by Jack Beatty. It is worth going to your library and reading. It is in the chapter called Betrayal.

    There isn’t info on the compensation for the Kroger CEO in the database.

    Lawrence R. Johnston
    Chairman of the Board CEO and Director

    In 2002, Lawrence R. Johnston raked in $12,223,342 in total compensation including stock option grants from Albertson’s.

  • I found this which is bascially the beginning of the article from a biz prof’s page. It is a word doc, so here it the text:

    Excerpts from:

    The Reckoning: Safeway LBO Yields Vast profits but Exacts a Heavy Human Toll
    by Susan Faludi, Wall Street Journal, May 16, 1990

    On the eve of the 1986 leveraged buyout of Safeway Stores Inc., the board of directors sat down to a last supper. Peter Magowan, Chairman and Chief Executive of the world’s largest supermarket chain, rose to offer a toast to the deal that had fended off a hostile takeover by corporate raiders Herbert and Robert Haft. By selling the publicly held company to a group headed by buyout specialist, Kohlberg Kravis Roberts & Co., and members of Safeway management, “you have saved literally thousands of jobs in our work force,” Mr. Magowan said. “All of us – employees, customers, shareholders – have a great deal to be thankful for.”

    Nearly four years later, Mr. Magowan and the KKR group can indeed count their blessings. While they borrowed heavily to buy Safeway from the shareholders, last month they sold 10% of the company (but none of their own shares) back to the public – at a price that values their own collective stake at more than $800 million, more than four times their cash investment.

    Employees on the other hand, have considerably less reason to celebrate. More than 63,000 managers and workers were cut loose from Safeway, through store sales or layoffs. While the majority was re employed by the new store owners, this was largely at lower wages, and many thousands of Safeway people wound up either unemployed or forced into the part time work force. A survey of former Safeway employees in Dallas found that nearly 60% still hadn’t found full time employment more than a year after the layoff. James White, a Safeway trucker for nearly 30 years inn Dallas was among the 60%. In 1988, he marked the one year anniversary of his last shift at Safeway this way: First he told his wife he loved her, then he locked the bathroom door, loaded his .22 caliber hunting rifle and blew his brains out. In addition to Mr. White’s suicide, at least two others tried to kill themselves. One was Bill Mayfield Jr., a mechanic in the Safeway dairy since it opened in 1973, who slashed his wrists and then shot himself in the stomach: the bullet just missed his vital organs and he survived.

    While much has been written about the putative benefits of LBOs, little has been said about the hundreds of thousands of people directly affected: employees of the bought out corporations. In the case of Safeway, the company dropped tens of thousands of employees from its payroll, suppliers and other dependent industries laid off hundreds more, and communities lost the civic contributions of a firm whose first store had been opened by a clergyman who wanted to help his parishioners save money. When Safeway itself selected a group of its employees to speak to this newspaper in behalf of the company, not one of those interviewed praised the buyout. Many employees find the post-LBO working environment more difficult — as a company legendary for job security and fairness resorts to hardball labor policies and high-pressure quota systems.

    Before the LBO, Safeway was hardly a prime example of the sluggish, out of shapecompany that LBO proponents like to target. Safeway was doing many of the things LBO experts advocate. It was remodeling its stores and creating the up scale “super stores” that have now proved such a big success. It was experimenting with employee productivity teams, phasing out money losing divisions, and thinning its work force with a program that included some layoffs but generally relied on less painful methods like attrition.

    All these changes produced earnings that more than doubled in the first four years of the 1980s to a record $231 million in 1985. The stock price tripled in three years, and dividends climbed four years in a row. When the deep-pocketed Hafts began to buy Safeway shares in the open market and then offered to buy the company, management felt it had to take defensive action. Selling to the Hafts might have cost Chairman Magowan his job and, he felt, the breakup of the company.

    The decision to sell to KKR brought immediate benefits to some. Shareholders got 67.50 a share, 82% more than the stock was trading at three months before – plus warrants that gave them a 5.6% stake in the on going company. The top executives of Safeway received $28 million for their share and stock options valued at over $100 million. The Hafts made over $159 million on their shares and options. The investment banks that worked on the deal made $65 million and the law and accounting firms shared another $25 million. KKR itself charge Safeway $60 million in fees just to put the deal together.

    The immediate gains for some triggered immediate costs for others. The first employees to be fired shortly after the buyout’s completion were more than 300 staffers from Oakland corporate headquarters and a nearby division in Walnut Creek California. The following spring, the entire Dallas area division was shut down, and nearly 9,000 more employees were dismissed, employees with an average length of service of 17 years.

    On the Friday afternoon before the dismissals went into effect, Patricia Vasquez, a 14 year systems analyst, a Safeway devotee famous for her refusal to take lunch hours, packed her service citations and left looking pale and drawn. The next morning her two young children found their single mother on the bathroom floor, dead of a heart attack.

    That Monday, Richard Quigley, a Safeway transportation manager, came home with the new that he would be fired. His worried wife’s blood pressure began to rise. Labor Day weekend – and dead hospitalized a diabetic who had been in good health for years, by Sept. 5. Rightly or wrongly, Mr. Quigley blames his wife’s death on his Safeway layoff.

    For many at Safeway, firing day was only the first in a long series of financial and emotional body blows. Ron Morrison, a former corporate systems manager lost his job after 14 years. While at Safeway, Mr. Morrison helped conduct a transportation study that trimmed millions from the company’s transit budget. And he wasn’t the only employee at headquarters whose work had brought the company big savings. Refrigeration engineer, Mikhail Vaynberg, says he invented a new cooling system for the stores that cut energy costs 35%, saved $1.6 million a year, and was copied by many suppliers. A Safeway spokesman says the company does not contest these cost savings claims. After he was fired, Mr. Vaynberg couldn’t find work in his field and, like many other employees fired at headquarters, says he couldn’t get a current letter of recommendation from Safeway: he says his boss told him he wasn’t allowed to supply a written reference because “you might use it to sue the company.” (A Safeway spokesman says it is company policy not to grant reference letters for “good, sound legal reasons,” but maintains that managers were allowed to make exceptions for employees laid off at headquarters.

    Safeway fired its corporate employees with no notice, cut off their medical insurance in as little as two weeks and provided severance pay of one week’s salary for every year of service, to a maximum of just eight weeks. And to get the pay, many employees were told to sign a letter waiving their right to contest the severance package later.

    Mr. Magowan concedes that many of the people fired at headquarters were “very good” employees. The cuts were made in a hurry, as he said later in a court deposition, so as “to put this whole unpleasant matter behind us as soon as possible.” For such haste, Safeway wound up paying $8.2 million to settle a wrongful termination class action suit and $750,000 to settle another suit for age discrimination. When the Dallas division shut down, the state unemployment office had to open on the weekend – for the first time ever – to accommodate the Safeway crowds. The Dallas employees had a thin financial pallet to cushion the blow. Their severance pay was half a week’s pay for each year of service, up to a maximum of eight weeks. And their severance checks didn’t start arriving until three months after the shutdown. Vacation pay arrived even more slowly: First the union had to go to arbitration to get it: then the company didn’t start mailing the checks until February 1989. While grocery competitors in Dallas eventually bought more than half of the 141 Safeway stores, they were less eager to pick up the unionized workers. According to a state funded survey of the displaced workers, stores under new management typically recalled no more than a half dozen of the 40 to 60 former Safeway employees who staffed each store. And wages fell sharply, no matter where the workers landed: In 1988, according to the survey, ex Safeway employees reported that their average pay had dropped to $6.50 an hour from $12.09 an hour.

    Cindy Hale, an 11 year Safeway employee, saw her wages fall to $4 an hour when she took an identical grocery clerk’s job with Apple Tree Markets. Her new employer would only hire part time, so Mrs. Hale, a single mother, lost her medical benefits. She eventually lost her house, too, and had to send her son to live with her parents. “But it wasn’t really as bad for me as it was for others,” says Mrs. Hale.

    For Dallas employees, working for Safeway had often been a total family experience, and many households lost more than one income after the buyout. The Seabolts lost three: Husband, wife and daughter all got their pink slips on the same day. Ron Seabolt, who worked in the company’s distribution center for 17 years, searched for months before taking a job as a janitor. Now he works at the post office.

    Kay Seabolt, a human resources supervisor, counseled ex employees for a year under a state job placement retraining program. The program’s counselors sometimes fished into their own pockets to buy groceries for those who streamed through the counseling center. Seared into Mrs. Seabolt’s memory is the day one tattered man arrived at the office. A long timer in the Safeway bread plant, the middle aged baker made his way to her desk with a slow, wincing limp. He apologized for his appearance, explaining that he had just walked six miles from the temporary labor pools: His car had been repossessed. He was living in a homeless shelter. “I gave him a few job leads,” she recalls, “but he was pretty shabby and I didn’t holdout much hope.” Before he left, she slipped him some money for bus fare she says. “I never saw him again.”

    When the layoff rumors first began circulating, Clara Sanchez took to praying in the parking lot of Store No. 677. Her silent pleas went unanswered. On April 24, 1987, she and her husband, Jesse, lost their jobs. She had been a checker for 12 years; he had been an order filler in the warehouse for 18 years.

    Clara could find no work, and is still unemployed: Jesse searched for eight months before the city hired him to cut grass for $3.55 an hour. Then he washed cars for $4.50 an hour. Two months later, he was laid off. Finally, with $14,000 in unpaid bills, the Sanchez’s filed for bankruptcy.

    The church sent canned goods, and Mr. and Mrs. Sanchez skipped supper some evenings so their children could eat better. After a while, Mr. Sanchez was too depressed to eat anyway. “I wasn’t a man; I wasn’t worth anything as far as I was concerned,” he says. “Why live if I can’t support my kids?” One Friday night, Mr. Sanchez told his wife that he was going to watch a wrestling match, but went to a friend’s house instead with a business proposition: “I told him I would pay him $100 to take my life. I didn’t own a gun or I would have done it myself.” The friend put his gun out of reach and sent Mr. Sanchez home.

    When Safeway pulled out of Dallas, the shock waves didn’t stop at the super market doors. The shutdown led to secondary layoffs at almost all the big food and beverage vendors in town, and some construction business suffered. For Harry W. Parks Co., a general contractor, Safeway represented 85% of annual revenues; Mr. Parks had dropped most of his other clients to assist Safeway in its big remodeling program. After the pullout, his company nearly folded, all but three employees were laid off, and Mr. Parks had a heart attack and died.

    “Safeway was his whole world,” says his son, Harry Jr. “That’s all he cared about for 30 years. When they pulled out, it was like his whole family died.”

    The North Texas Food Bank suffered, too. It lost a founding member and its leading contributor; Safeway used to donate 600,000 pounds of food a year. “The bottom line,” food bank director Lori Palmer says, “is fewer people ate.”

    The article continues and chronicles the effects of the cutbacks in the domestic and overseas operations, of the store managers that work a seven day penance because they did not meet quotas, of the truck drivers becoming unsafe from working 16 hour shifts, and of the meat cutters being forced to take part time positions and forcing them to commute over 100 miles to fill a temporary vacancy in another store. The article also tells of the British division for $929 million, which was part of the $2.4 billion that KKR got from asset sales – or 40% more than KKR officials says they had projected.

  • This is just like when the presidential candidates say something about a specific American that exemplifies some point so they can put a face to their theories and project the idea that they truly care about people.

    I wish some people would study statistics. I know people hate statistics because it takes the face away from people, but you know what, it also can teach you something.

    Let’s say in this heartfelt article, which should probably be presented more objectively if it was written by a biz prof, that there are 15 stories of heartbreak in here. And how many workers did they say were affected? 63,000. Let’s see, 15/63,000 = .02381% 1 out of every 4200 people. That ain’t a lot folks.

    How many people got back on their feet? Are they mentioned in this article? Do you really think these examples of heart attacks, suicides and bankruptcies are the typical story?

    This just in, layoffs suck. I repeat from my earlier post, workers in ANY industry need to understand the progression, or degression of the environment they work in. If and when it begins to suck too bad, they need to make the switch. Things change, people need to be malleable.

    I am sorry to sound so cold, but no number of heartache stories will make large wages and benefits cost-effective for grocery store employees.

  • Leaving emotional stories aside, I did look a bit more into this. It seems that each side has a little spin on the situation, of course.

    Anyway, a few of the big issues involve the difference between existing employees and new hires and what exactly constitutes a “net” pay raise or pay cut. For example, Von’s is not suggesting that any current employee take a gross pay cut, and is in fact suggesting a $.30/hour gross pay raise. But, that pay raise won’t kick in for another two years, while health insurance charges would be taken out starting much sooner than that. Hence that factually-correct but misleading statement from the stores that employees would be getting a pay raise and the factually-false but essentially true statement from the union that employees would be getting a pay cut.

    Even then, 30 cents per hour works out to $6/week for a part-timer (20 hours/week), or $12/week for a full-timer (40 hours/week). Given that health insurance premiums are going to go up by $5/week for individuals and $15/week for family coverage, people needing family coverage are definitely going to be hurt with this change, while single people will actually get a “real” net pay raise, though a small one, and only after two years.

    There is also some back-and-forth about the idea that an entry-level bagger is going to make less, but that doesn’t affect existing employees, only new hires, so the union seems to be using this primarily to get their employees worked up. They envision a system in which new hires are fired after three years in order to avoid paying them the rate they’re paying current employees. Anything is possible, but generally this seems to fall into the category of fear-mongering.

    Each side seems to have a general point in the negotiations, so I guess the question is what is reasonable or feasible. For example, I pay $552.32/month ($127.46/week) for family health coverage, up from only $295.74/month ($68.25/week) a few years ago, so it’s honestly hard for me to sympathize with people who are seeing their costs rise by $15/week to a total of $15/week. As both a straight dollar value and even as a percentage of my gross income, $15/week is much lower than what I pay. I’m not saying this is right, but I suspect many other people feel the same way – it’s hard to feel sorry for someone when you have to seriously wonder whether or not you might be better off quitting your current full-time salaried position to take up stocking shelves at your local supermarket. My mortgage says no, and I’ll stay where I am. But if my wife — who currently does not work outside the home — got a job at Von’s making minimum wage, we would save $487.32/month once her medical coverage kicked in. That’s almost $3/hour in savings, and that’s at the new unacceptable rate.

    See why this can be such an emotional issue? Everybody approaches it from a different direction, and many people have past experiences with unions that shape their current views, too.

  • i try, even in times when money is very tight, to completely avoid shopping at the large chains.


    because i’d like to think that maybe my actions will stave off what seems like the inevitable conversion of our country into a coast-to-coast strip mall.

    capitalism-as-religion is sickening.

  • Eric Olsen

    Capitalism is just an economic system. It can only become a religion if one worships economic systems, or believes, (ironically!) like Marx, that economics determines everything.

  • Hooray for the Bush administration!


    Obviously even in a frontpage story in the WSJ (it wasn’t written, but a biz prof, just being used by one on his class), Faludi can’t write about hundreds of employees, but she does write that even the people she interviewed supplied by Safeway weren’t positive about the LBO.

    And she notes:

    More than 63,000 managers and workers were cut loose from Safeway, through store sales or layoffs. While the majority was re employed by the new store owners, this was largely at lower wages, and many thousands of Safeway people wound up either unemployed or forced into the part time work force. A survey of former Safeway employees in Dallas found that nearly 60% still hadn’t found full time employment more than a year after the layoff.

    But my point in posting this article and linking to the Post article above is that this doesn’t happen in a vacuum with only the unions as greedy villians.

    There was plenty of greed on Safeway’s part and it impacted real people, people with families, not just statistics.

    And the media too rarely presents stories about working people and how their lives are impacted by the people in upper management who own stock which their biz sections are aimed at. There used to be labor reporters at every paper, but they have almost vanished.

  • Eric Olsen

    The labor perspective should count just as much as the management/ownership perspective, but not more. The whole thing has got to be about compromise and reasonableness.

  • “stop talking about letting kids escape.”
    — teachers union executive (name escapes me).

    teachers unions and their despicable disregard for students are the problem. carping about insufficient rates of increase in spending is not the solution; half-measures such as the 2001 law are little more than stopgaps (the automatic assumption that somehow a shot at bush would rebut the criticism is disappointing).

    we’ve poured ridiculous amounts of money into public schools to little effect. there are two solutions: competition or deunionization, or preferably both.

  • Someone should probably start another thread to talk about education and unions because the issues for teachers and supermarket workers are very different.

    Ofcourse any negotiation is about compromise, but there has been a shift in the balance of power to the employers particularly through the use of replacement workers.

    Vons and the other grocery stores may spend (and lose) more money fighting the union than they would making a reasonable compromise.

    Another thing about grocery workers is that many may not still be working at Vons in two years to get their raise.

  • But that’s just the point … the union is unwilling to compromise. They’ve stated emphatically that they will accept no rollback in “hard won” concessions from management. I’m only against the union in this case because they are unwilling to compromise. I can see about 10 different ways the union and the chains can reach an agreement, but each one of them involves the union giving up some benefits. The union says it won’t do that, so it makes it hard for me to have any sympathy for them.

  • So if your employer asked you to give up some of your benefits, you’d say fine?

  • i did sort of randomly introduce another topic. some other time then…

  • Actually, my employer doesn’t “ask” me if I’ll accept lower benefits, or to pay more for my insurance. They tell me. Been there, done that. And I can either accept it or look for another job.

  • Steve, I can’t answer for Howard, but I can tell you that I bring home less after paying my health insurance premiums and copays today than I did several years ago, with the same employer. My salary has stayed exactly the same, my health care costs have risen, and the only thing that keeps the disparity from getting ridiculous are the two Bush tax cuts (speaking of changing subjects…).

    In fact, I won’t just spot generalities, I’ll give you numbers: My last raise came on Jan 1, 2001. That raise actually came about only because my health insurance deduction rose $147.61 that same paycheck. Since that time, my health insurance costs have risen sharply twice, and I’m now paying $148/month more than I was on Jan 1, 2001. My gross pay has remained unchanged. Fortunately, between popping out another kid and two Bush tax cuts, my take-home pay is “only” $49.47/month less than it was nearly three years ago.

    Does that qualify as being asked to give up some of my benefits? I should add that during this time, my boss continues to make more money in a month or two than I make in a year. Granted, he no longer drives around the Ferrari like he did during the dotcom boom, but now it’s a Mercedes, so he’s not doing too badly.

    For the record, I happen to know that his portion of my health care costs has gone up, too. In fact, he pays for my health insurance outright, and for half of the cost of my family coverage. Were I single, I might never have noticed the rising costs, but as it is, I know his share has gone up by more than $200/month, too.

    I wonder how many of the grocery-store union employees have any idea how much Von’s costs have risen?

  • Anybody?

  • melissa

    You’ve made an excellent point, Howard, regarding the economic reality of the situation, and a pretty clear assessment of everyones’ position. We’re all motivated to seek what is best for ourselves. The strikers, the corporations, and the consumers are all driven by self-preservation.

    With the state of the economy however, I think the breakdown of contract negotations and the unions’ decision to strike against Vons will ultimately be detrimental to the grocery workers’ positions. The unemployment roles are burgeoning with hard-working people eager to work, desperate for money. The economy is so bad. And let’s face it, they’re essentially unskilled laborers.

    I think the unions have done them another diservice by suggesting to these employees that they’re irreplacable. Even as a highly skilled worker, that’s a really bad attitude to have. Even entire governments and political regimes aren’t immune to replacement.

    I think the unions need to accept that health care premiums are expensive and be a little more flexable on the issue, and I don’t think its unrealistic or unfair that the employers ask the employees to shoulder some of the burden of rising cost. 1,300 a year? Wonderful premium. My family pays 4 times that. Copayments too.

    I think there is something hokey going on with this health care issue too, aren’t HMOs union organized? With both sides propagandizing their issues it’s hard to get a line on all of the underlying nuances.


    And yes, I’d say that Wal Mart has the corporate clout to devour a company like Kroeger or Safeway. Remember a little chain called Kmart?


    For reference, I’m a scab, and I’m making damn good money. If the strike goes for three weeks I can more than cover the cost of fees and books next term. The state raised my university fees, my registration fees, my gas prices, my taxes. I’m sorry for any hardships that strikers are going through but times are tough all over and I think that they need to accept that reality and come to a compromise before the corporations determine that they can do without any of their old workers after all.

    I read commentary the other day, a striker was calling replacements “inexperienced bottom feeders with no customer relation ability.” I think that many of these strikers would be dismayed to know that virtually everybody who is scabbing in the store that I’m at has significant retail, bakery, deli or wherehouse experience. We’ve got drivers, meat cutters, book keepers, produce clerks. Many of them are college educated as well. If they don’t want to compete with this group of scabs for their own jobs somewhere down the line, they better get back to work. We’re being well trained in addition to being well paid.

  • Katie

    Something else I haven’t heard anywhere except from a striking Vons employee is that the health benefits that they will have to pay for are drastically inferior to the ones they have had. The chains want to totally eliminate vision and dental and require them to pay 50% of the costs when staying in the hospital. That’s pretty drastic. Maybe that’s why, to some, the monthly contributions seem so “reasonable.”

    I know several of the workers at my neighborhood Vons are single parents. The majority of the grocery store workers who are on strike work part-time. There are very few full-time positions. Many of these single parents qualify for WIC and HeadStart, even with their jobs at Vons. Knowing that, I have a hard time identifying with the arguments some make that the strikers are being greedy.

  • Nobody is accusing the strikers of being greedy. That’s completely a straw man.

    What some of us are questioning is their reasonableness. Going around refusing to negotiate — their position before the strike started — on key points makes them look unreasonable. Now, of course, they say, “oh, we’re willing to pay for our health insurance. We just don’t like chain’s current proposal.” Well, if that’s the case, why did they strike instead of negotiate?

    Katie, you seem to be of the opinion that being a clerk in a supermarket should be a career. Why? Especially for a part-time worker. Find me a non-union job where part-timers can get any health benefits at all? And why should part-timers get health benefits. Maybe the full-time workers, presumably the ones who really need the job to support a family, could get BETTER benefits if the union didn’t insist on giving benefits to part-timers. And maybe the chains would be more inclined to have MORE full-time positions if they didn’t have to pay for benefits to part-time workers? That might be the useful compromise right there — fulltimers can keep their current benefits in exchange for trimming down part-time positions, creating more full-time positions.

    And for anyone not making it on a clerk’s wages, part-time or full-time, maybe it’s time to consider a career change. Nobody is forcing these people to work in this profession. Our economic system is elestic enough to make room for more highly skilled workers if more people want to go out and get that kind of training. I expect some leftist/commie-leaning readers to flame me for my optimistic view of capitalism, but no amount of wishful thinking by capitalism’s enemies is going to change the truth of that statement.

    Melissa, good post … I’m going to quote it over on my blog, howardowens.com.

  • joe


    Everyone in America should be an executive and making executive pay. Anyone who isn’t should go back to school until they can move up in the world.

  • Tony Ha

    The supermarket strikers have gone nuts!! If you agree with the stirkers then you are nuts too. A supermarket job is not a big time job so don’t expect much from it. If you want a better future then goto school or be creative instead of just being lazy and working at a supermarket job for the rest of your life. You chose your path in life and this is what you get so deal with it. These greedy strikers need to shut their face up and move on. A lot of people have to pay copayments but you dont see themm striking, these lazy ass strikers need to get out the way so us consumers can shop.

  • Anonymous

    You know, I think there is a lot of misunderstood people out there. First of all if it was so easy to just move on, don’t you think we would. Believe it or not, all retail clerks are not lazy dumb asses just trying to get more out of there employer. After 15 years in the buisness, I think I know. At my current location in Az., we have not recieved a raise in over 3 years, not a cost of living raise or anything. My work load keeps getting bigger and they keep taking away the hours to get the job done. Now, they want to take away my time & half on sundays, and make me pay my insurance premiums that have been paid by them for ever. Ya, this pisses me off a little. The only reason I have stayed on this job for so long is because we had great benefits, and between my wages and benefits, I made more than a lot of people who have furthered their education. But now, I want out because it’s only going to get worse, and for you morons out there who are inconvienienced, just wait. The more people who get replaced by lower wage earners who don’t care, well, your level of service is going to really drop. Why should the people who are the direct link with the customer give a shit about how they treat them, when the company doesn’t give a shit about us. They need to cut costs, then how about not sponsoring a multi million dollar golf tournament, specially during negotations. For you morons who think a union isn’t important, just remember that when your kids or grandkids have to work for shit wages, or are you truelly a privelaged citizen who was born into money and have not a clue of what its like to try and make it from the bottom up. Unions not only protect the rights of workers, but they are strong advocates for basic human rights, for the basic rights that this country was founded on, or have you forgotten. You might not be so quick to judge all those grocery store workers, because if this country keeps on going, it will affect you lazy fucks also. Unless your one of the few who are privelaged. As for the rising costs of steel being the falt of the union and the greedy steel workers, man are you on drugs or what ? have you ever worked in a steel mill, or walked in there shoes. Have you ever walked in the shoes of anybody. It’s pretty easy to sit on your side and judge isn’t it. It seems to be another American trend. But if you think that wallmart invading every community with its so called low prices wont affect you, think again. How much of you tax dollars is going to help pay for there access because they cant afford health insurance. How many people are out of jobs because wallmart forced there company to lower there prices for there product to be in wallmart, forcing these manufactures to go over seas for cheap labor. Do your research, there is a lot more to it. and our government allows it. more profits for the big corporations, less pay the workers, thats the American way right ? America better wake up, and those of you that feel it wont affect you, wake up, it’s going to affect all of us in one way or another.

  • Nice comment. Keep up the fight. I hope things work out for you.

    Howard Owens: blaming other low-wage workers for your lack of disposable income is silly. The unions have a right to demand insurance, fair working conditions, and a livable wage. By your logic, your employers could screw you even further in order to “reduce costs.” There’s been a lot written about how grocery chains artificially inflate certain food prices, so getting indignant about the small concessions workers are seeking is placing the blame in the wrong damn place.

    Brian Flemming: so sorry your consumption practices were less convenient for a week. Only ONE flavor of Quaker oatmeal and not your favorite soda? Poor baby. How DID you persevere, Tinkerbell?

    The compromise, middle-road rhetoric always sounds good and makes people feel really mature, but in the case of unions it’s almost meaningless. Union-busting is stupid and wrong and this country has the worst record with regard to labor rights and unions compared to the rest of the industrialized world. Our multi-national corporations have very little regard for their workers. Outsourcing and wage exploitation abroad show the value profiteers place upon the “love, care and pride” they claim their products are made with in advertising featuring pictures of grandmothers in Topeka and happy, smiling white children.

    I don’t know what you mean by “limits” on unionizing, but it’s silly. Those of you who champion capitalism should realize that when union demands become too unreasonable and onerous, they become less effective and unions lose bargaining power. They shouldn’t LOSE their ability to negotiate as a collective or defend their rights. To say that should be limited isn’t a substantive benefit to the consumer or to workers, which by last count almost ALL of you reading would qualify as. The reality is that a vast majority — 80% plus — of this country, whether they identify themselves as middle-class or upper-class are WORKERS who get their paychecks from companies and owners. Defending the rights of workers benefits you far more than griping about 19 cents on a soda, a price that isn’t a consequence of labor disputes anyway. Taking an elitist, classist stance toward grocery workers because you want to dismiss them as “entry-level jobs” is easy, but keep in mind that your denigration of their rights affects your own ability to prosper and get a fair shake in your own line of work. You’re helping to set a precedent for the denial of your own ability to have control over your work and prosper.

    That’s something we should remember in all the talk about Reagan: the man was as unfriendly to labor and workers in this country as anyone in history.

    That is all.

  • Derek

    A large part of the problem[i feel] stems from the physicians who treat the insured, over charging insurance companies, who then pass the xtra cost on to employers, who then pass that cost on to employees. seems like the system needs an overhaul.