Union contracts for grocery workers in the big Northwest chains expire next Sunday, affecting 25,000 workers directly and thousands more whose upcoming contracts will be patterned after the big chain contracts. In the next few weeks, you may be faced with deciding whether to cross a picket line or find a new place to shop.
Will there be a strike? A lockout? Let’s talk about why both sides ought to agree on a new contract without workers having to walk the pavement. To do this we need to look backward six months and then look about four years into the future.
Strikes and lockouts never pay off in the short run. Raises after a strike aren’t high enough to pay back the lost work hours.
And, especially in a perishables business like groceries, management can’t make up for lost sales. Still, we do see strikes and lockouts. One explanation is the "let’s prove who’s most macho" theory.
If a union is never willing to walk, management will know it can pretty much dictate contract terms. And the same argument holds for the company side. So once in a while labor goes out, or management locks them out, in order to maintain credibility.
But the "I’ll prove I’m tougher than you are" theory doesn’t apply in the current situation because of two pieces of recent history.
First, the grocery industry just took a nasty, four-month strike and lockout in Southern California. Union members lost months of wages. The industry — same big chains, Albertsons, Safeway and Kroger (Fred Meyer, QFC) — lost hundreds of millions of dollars.
Neither side has any need to prove that they’re tough at the moment. Second, after the Southern California mess, the same players managed to settle in the Baltimore/Washington, D.C., area without a walkout — so we have a good precedent for a peaceable agreement.
The Baltimore/D.C. deal was mostly a steady-as-you go contract. Workers will get a modest raise and in return agreed to a bigger deductible on health insurance. The significant change was the adoption of a two-tiered contract where newly hired workers start out at a lower rate than current job holders.
Now let’s look into the future to the contract after this one — that’s the one that’s going to be tough. It would be wise to hold off on big changes until next time.
Sure, employers want to hold down costs. But what employers really sweat over is how their costs compare to the competition.
The current negotiation covers the bulk of area grocery workers — and other area chains are likely to more or less copy whatever happens in the current contract.
Here in the Northwest we don’t have a big presence of low wage, non-union, big box competitors. (Think Wal-Mart.) So the pressure on the employer side here is less than it was in Southern California.
Next time could well be different.
Sure, the union wants high wages. But the union also wants to keep its members working. Today, there’s not too much pressure on the employment front. If more non-union superstores enter the area by the next negotiation, that situation could change. And in the next few years technology in the form of self-checkout could be a further job threat. So the union, too, has more to worry about next time.
In other words, there’s reason to expect fundamental change in the grocery labor market by the time the contract now being negotiated expires. In the next contract, management and labor may find they’re going to sink or swim together.
Today, it’s in both sides’ interest to settle without a fight. And while they’re settling they should try to store up some good will to use next time around. But big changes with big long-run consequences should wait until the future for the Northwest grocery business and labor market becomes more clear. That means no two-tiered wage system in this contract.
Dick Startz is Castor Professor of Economics and Davis Distinguished Scholar at the University of Washington. He can be reached at econcol@u.washington.edu.
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