L.A. Strikes Over Health Care: The Hidden Issues

It always amazes me, although it really shouldn't after all of these years, how there can be so many news stories over a strike and many of the main issues still get lost.

For example, reading most news articles, one might think that three Southern California grocery chains are on strike. Actually, however, only Vons is on strike. In a show of management solidarity, Albertsons and Ralphs have locked their workers out.

The other piece of missing information is what the fight is really about. To read most of the papers, one would think that the strike is over a simple $5 co-payment and $15 a week for family coverage that the companies want to impose. BUT

On the surface, the changes proposed to the grocery workers' health benefits appear minimal: Where employees now pay no contributions to their health care premiums, they would have to contribute $5 per week per employee for single coverage, and $15 per week per employee for family coverage.

This is the only thing employees are directly being asked to pay, said Stacia Hill Levenfeld, a spokeswoman for Albertsons. She said no other changes were written into the proposed contract, which has not been disclosed.

But it's not the $5 or $15 a week the workers are striking over, said Mickey Kasparian, president of UFCW Local 135 in San Diego. What the union disagrees with, he said, are costs that would result from lowered employer contributions into a trust fund that pays for insurance premiums.

"This is not about us being stubborn and walking on a picket line for five bucks a week," Kasparian said. "It has to do with the entire cost of the plan."

According to Kasparian, the grocery stores now pay $3.78 into the employees' insurance fund for each hour an employee works. But he said the rejected proposal called for lower contributions for new hires, reducing them to $1.35 per hour.

As new employees are hired over the three-year contact, Kasparian said, that would reduce the fund to around 50 percent of its current worth. He said that would eventually force the chains to cut back on benefits and go with more bare-bones insurance options. These would most likely carry with them higher co-payments for out-of-pocket expenses such as office visits, prescription drugs and hospitalization.

Other cuts would also have to be made, Kasparian said, including the elimination of some of the health plans that union members choose from.

How most Americans would know this without reading several newspapers is beyond me. It's not beyond me, however, how too many Americans still view unions as selfish and unreasonable.

And then there's this. The supermarkets justify their hardline on the fact that Valdemort's Wal-Mart's coming. (See posting immediately below.) While it's true that Wal-Mart's growth has threatened supermarket chains (and workers) in many parts of the country, the spectre of Wal-Mart may serve as a convenient excuse for many companies' self-inflicted wounds:

The supermarket companies have all been warned by Wall Street to get their costs under control or risk seeing their stocks shunned like sour milk. But other than Kroger, whose management appears to be widely admired by investors, the companies have been struggling with self-inflicted wounds. Safeway has been dealing for years with the results of a series of mismanaged acquisitions it made across the country and with the aftermath of a 1986 leveraged buyout, which saddled the company with debt. Albertsons, whose operational systems are less efficient than those of its rivals, has been a chronic also-ran behind its two big rivals in many cities where all three compete.

These ills hobbled Albertsons and Safeway when the economy turned down. By some measures, in fact, most of the companies' losses of revenue over the last couple of years can be blamed on the recession, which discourages the purchase of high-profit goods such as fine wines and specialty foods. "If you look at comparable-store sales among food retailers today," Mark Husson, a supermarket analyst for Merrill Lynch, told the trade magazine Supermarket News last month, "if they're down 2%, I think 1.5% of that is due to the economy."

That suggests that the Wal-Mart issue is merely a convenient stalking horse for labor concessions the supermarkets would be asking for anyway. Although Wal-Mart has announced plans to create 40 California "supercenters," the behemoths that include grocery departments, none has been built in the state and the schedule for a rollout is murky.

To get more information from the horse's mouth, check out the workers' strike page here.