Your eyes on California Government

AUG. 23, 2011

By JOHN SEILER

It’s been less than eight years since the Southern California Supermarket Strike of 2003-04. About 70,000 United Food and Commercial Workers Union members walked off the job at Albertsons, Vons and Ralphs for four months. “Scabs” — people willing to work — were hired. Pickets were set up.

The grocers basically won by signing a contract allowing them to cut pay and benefits for future workers.

It also came out during the strike that the UFCW union bosses were highly paid. Michael Hiltzik, currently a Los Angeles Times columnist, in 2004 reported in Socialist Viewpoint:

Take Rick Icaza, the head of Los Angeles-based Local 770, which has 30,000 members. Icaza earned $273,404 in 2002, the latest period for which the figure is available. That was nearly a 10 percent raise over the prior year.

Icaza, 69, out-earned even John Sweeney, the national president of the AFL-CIO, the nation’s largest labor organization. Sweeney earned a salary of $247,500 that year. Richard Trumka, the AFL-CIO official who has just been assigned to craft a nationwide campaign to try to save the grocery workers, should probably ask Icaza to pick up the tab if they dine out together. Icaza out-earned Trumka in 2002 by a comfortable margin of $56,000.

The phenomenon of overripe compensation at the UFCW starts with International President Douglas Dority, whose $329,792 made him the best-paid president among the AFL-CIO’s 64 member unions in 2002.

Nice work if you can get it — even if your “workers” aren’t working, but on the picket line.

2004 vs. 2011

A lot has changed since 2004. Right after the strike was over, I noticed that Albertsons started installing a lot of automated checkout stands.

Walmart and Target have vastly expanded their grocery offerings. And Fresh & Easy started opening stores. Currently struggling, Fresh & Easy finally could solidify itself in the tough U.S. market during a strike at its competitors.

Then there’s the economy. In 2003-04, the real estate boom was in full force. As the strikers struck in October 2003, unemployment in California was just 6.6 percent, and dropping. In July 2011, it was nearly double that, at 12 percent, and rising.

In 2003-04, picketers got strike pay. But they also could supplement that with jobs in the rest of the economy. In 2011, that will be much more difficult.

As in 2003-04, a measure of contention this time is costs for medical care. Reported the Daily News:

Both sides announced last month that they had reached a tentative agreement on the employers’ contributions to pension benefits, but payments to the union health care trust fund have been a major sticking point.

Ralphs currently pays more than 90 percent of employee health coverage costs, Doyel said. Workers hired before 2004 pay nothing for health insurance while those hired later pay either $7 a week for single coverage or $15 a week for family coverage.

The companies’ proposal would raise that to $9 a week for singles and $23 a week for families. That is much lower than the average cost of health care insurance in California, she said.

But Shimpock said that the union is concerned about the long-term sustainability of the health care fund.

“With the amount they’re offering now, the fund would go bankrupt by next September,” he said. “We’re worried about increased costs, of course. But it doesn’t matter if premiums are $2 or $200 if the benefits are eventually eliminated.”

The union should have thought of that before it backed President Obama in the 2008 election. Their endorsement during the primary race against Hillary Clinton said:

we believe that Senator Obama is the best candidate to build a movement to unite our country that will deliver the type of change that is needed — for good jobs, affordable health care, retirement security and worker safety.

The union got what it wanted: Obamacare. But it’s far from “affordable health care.”

Obamacare Health Costs Increases

Earlier this month in Forbes magazine, Sally Pipes described the vast cost inflation under Obamacare. She is the president and CEO of the Pacific Research Institute, CalWatchDog.com’s parent think tank and an expert on health care finances. Her recent bestselling book is, “The Truth About Obamacare.” Pipes wrote in Forbes:

Obamacare won’t help contain health costs, as the president so often claimed while lobbying for passage of his reform package. Instead, it will exacerbate them. Remember his oft-repeated statement that his plan would “cut the cost of a typical family’s premium by up to $2,500 a year.” As the CBO rightly explained, premiums will rise by $2,100. 

Researchers estimate that health care spending will grow an average of 5.8% per year through 2020. The actuaries found that total health care costs in this country will hit $4.6 trillion by the end of the decade — equivalent to about one-fifth of the entire U.S. economy. That’s about $14,000 in annual spending for every man, woman, and child.

In 2014, when the law’s major coverage provisions kick in, total healthcare costs will jump 8.3 percent — a rate well above the 5.5% expected for 2013. As the study puts it, the president’s law is “anticipated to contribute to a significant acceleration in the national health spending growth rate in 2014.”

Federal Mediation

Currently, federal mediators are involved in trying to avert a strike. Given the sour economic climate of 2011, a strike is much less likely this time.

Then again, unlike in 2003, this time the UFCU has a friendly Democratic president in the White House, Democratic control of the U.S. Senate and a friendly Democratic governor in the state house. And the California Legislature is even more Democratic and controlled by the unions than it was previously.

In its endorsement of Gov. Jerry Brown last year (a .pdf you have to download), the union explained, “Brown supports the Obama Health Care Plan and has even said he would try and improve it by expanding coverage to those who slip through the cracks.”

Another factor is that the UFCW’s brethren in the government-workers’ unions are causing a massive crisis in state-funded pensions. Private union workers, of course, have private pensions. But government union workers usually have pensions largely, or entirely, funded by the taxpayers — and, worse, guaranteed by law to be funded by the taxpayers.

As former Orange County Treasurer Chriss Street writes today on CalWatchDog.com, these California government-worker pensions now are a staggering $884 billion in the red. Unless cuts to these pensions are made, taxes will have to be increased, including on grocery stores and private-sector union workers such as UFCW members.

Thus, while UFCW members go on strike and maybe lose their jobs, their supposed buddies in the government unions retire on massive pensions. It’s a sharp contrast of the difference between the two types of union workers, government vs. private. The future may see this “solidarity” strained.

Meanwhile, as unemployment rises and tensions across the state increase, there is likely to be a lot less sympathy this time around for those who refuse to work, but strike.

Tags: Jerry Brown, John Seiler, President Obama, UFCW, unemployment, United Food and Commercial Workers