Wednesday, May 09, 2007

Grocery Giants' War on the Middle Class!

In sunny SoCal, grocery behemoths Ralphs (Kroger Corp.), Albertsons, and Vons/Pavilions (Safeway Corp) are preparing to do battle with their biggest enemies: their customers.

These public companies must perform for their C-Level executives, board members, and shareholders with growth. As a line-item in a profit-and-loss statement, labor costs are the number one item, and their greatest expense keeping them from further profit growth - energy, real estate, and other costs can't compare. While the exes and board members receive lavish salaries and benefits, regardless of growth or success in many cases, their employees are asked to happily accept their role as runners to the bottom while the companies are mis-managed to mediocrity.

These companies can act as one to direct a huge pool of employees in SoCal, and they have opposition, the UFCW. I worked for a long-gone store in the '80s and I had to join the UFCW - they took my dues and provided no support the few times I asked, so I have to union-love here. But the union can act as one for its members as these members can't against the unified front of the major grocery store owners.

Four years ago things came to a head in a debilitating strike. The three store chains were having profitable years. In this growth-at-any-cost struggle, the companies decided to unilaterally increase their profit at the expense of their lowest-paid. Living costs, especially health care, had greatly increased for these workers over the previous few years - growth in the SoCal economy had largely been restricted to real estate, and many grocery workers weren't in a position to benefit from this, and tax breaks given were only for the wealthy, including corporate cheifs David Dillon, Steven Burd, and Lawrence Johnston.

Yet, these workers were asked to bear the brunt of this growth madness by paying more for less medical care, accepting more part time work (excluding them from corporate healthcare altogether), and agreeing to a longer, sometimes impossible, climb to more stable full-time positions with appropriate benefits. Creating a huge straw man out of Wal-Mart , the employers bred fear by saying that their workers could either accept these demands or be swept into the fiery blue furnace with the happy smiling face.

With no good faith on the part of the employers in negotiations (in violation of federal law) and collusion to split profits during the strike (again, in violation of federal law), the unions voted to strike. Ralphs, Vons, and Albertons hired scabs to replace their longtime employees. Customers stayed away. Union members picketed, lost homes, and went to the emergency room for medical care.

The UFCW found no heart, soul, or brains to come up with a way to support their dues-paying members, and folded. Instead of a stream back to their previous positions, long-term employees flooded away from the stores, many landing worse or no job for a good amount of time. What we see now in 2007 in these stores is a much-smaller-than-before fresh crop of faces, responsibility-without-authority for those in customer-contact positions, and a sameness from store to store that makes us feel like these grocery stores are one big chain.

I now give all of these stores about 30% of what business I gave before the strike, just on principle, and I bet I'm not the only customer they have essentially lost. Their reliance on affinity programs, unstaffed customer service counters, etc., make grocery shopping a chore. Non-union Trader Joes, Farmers Markets, Costco, and even the internet, make my grocery consuming a better experience than it was, and I for one am not going back.

Now, the giants want their employees to pay a larger percentage of their healthcare costs. Healthcare costs have skyrocketed, mostly due to public-company middlemen that didn't exist a generation ago, drug costs, longer lives that require more healthcare and drugs, etc. There's no law that says that companies have to provide medical care for their employees - this practice started when postwar tax breaks were granted to companies that did, and at that time is was considered cheaper than actually paying employees more - but corporate executives and board members get state-of-the-art healthcare benefits while they could pay for these services, all the while expecting their lowest-paid employees to pay a significant portion of their income for the meagerest of healthcare.

This imbalance must end. We have to find some way to pay even our lowest-paid so they can afford great healthcare (with affordable catastrophic-event coverage available), require employers and governments to insure all employees equally (wouldn't the free-market bring down costs for all if this was required?), or provide a single-payer plan at the federal level (to make us competitive on a global level again). Anything less, and the greatest country in the world with the best available medical care should be considered a human rights criminal of the highest order.

Speak out!

Contact the princes who rule these companies and demand some equity, with no strikes necessary. Vote with your $$$ and don't shop where the economic divide is wide enough to swallow you whole.

Grocery Store CEOs with public political contribution info ;-)

David B Dillon
CEO/Chairman of the Board/Director
Kroger Co
1014 Vine Street
Cincinnati, OH 45202-1100

special interest
total: $12,900

Lawrence Johnston
Chairman, Chief Exec. Officer, Pres and Chairman of Exec. Committee
Albertsons Llc
250 Parkcenter Boulevard
Boise, ID 83726-0020

special interest
total: $55,750

Steven Burd
Safeway Inc
5918 Stoneridge Mall Road
Pleasanton, CA 94588-3229

special interest
total: $38,950

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