Wednesday, August 21

A closer look: Dispute over health care benefits may backfire

Strikes' success would lead to fewer employees, failure would lead to questioning unions' validity, analysts say

From the grocery stores to the public transportation system to
law enforcement, the average citizen in Los Angeles has recently
encountered inconveniences due to strikes.

The supermarket strike, the MTA strike and the sheriff’s
sickouts all have one main issue in common ““ health care.

“More strikes are called because of disagreement in health
care than any other issue,” said Kent Wong, director of the
UCLA Center for Labor Research and Education.

The grocers and clerks at Ralphs, Albertsons and Vons stores are
picketing because of disagreements in wages for new hires and over
disputes in health benefits.

The mechanics at MTA are striking over how much money MTA should
contribute annually to a health care fund.

The sheriff’s deputies are systematically calling in sick
to protest labor costs between the county and the deputies. The
deputies want the county to offset rising health care costs and
they want a 3 percent raise annually for the next three years.

On Oct. 15, 219 out of 243 deputies in downtown Los Angeles
called in sick.

The battle over rising health care costs caused outgoing Gov.
Gray Davis to sign The California Health Insurance Act on Oct. 5.
The bill will force employers to pay a percentage of
employees’ health insurance; the percentage is determined by
the size of the firm.

From 1994 to 1999, health care costs only grew 2 percent to 7
percent annually. Since then, there have been four consecutive
years of double-digit growth in health care costs. Towers Perrin, a
consulting firm, predicts this trend will continue and that in
2004, health care costs will increase by 14 percent.

Currently, 44 million people in the United States are uninsured,
and 20 percent of L.A. County is uninsured.

The supermarket strikes in Southern California are being watched
carefully by union members all over the United States.

“The supermarket strike has more than local effects;
that’s why it’s hard to settle,” Mitchell

If strikers in Los Angeles succeed in obtaining health care and
a wage increase, strikes will become more common throughout the
United States, said Earl Thompson, a UCLA professor of economics.
However, if they fail, it will discourage other employees from

“It is ill-advised, ill-structured and ill-timed,”
Thompson said of the supermarket strike.

He noted that if the health care benefits pass, the grocery
stores will have an incentive to hire fewer employees.

Since part-time employees currently receive health benefits,
many of these employees will be fired in an effort to cut costs.
With fewer employees, competition will increase, and “when
workers compete, benefits decrease,” Thompson said.

About 75 percent of employees at each supermarket are part-time,
said Jill Cashen, an assistant director at the communications
department of the United Food and Commercial Workers union.

However, Cashen is not worried that part-time employees will be

“It’s the reverse,” she said, explaining that
old-timers are usually fired in order to hire new employees who
will work for less money.

Thompson said the supermarket strike almost seems to have been
organized by the grocers themselves.

He does not expect the union to succeed, and once the strike
fails, he expects the employees to question the validity of the
union. He also expects the employees will wonder why they are
paying union dues when the union cannot succeed in keeping the
wages and benefits that it already receives.

“This is a real test of the strength of the union,”
said Ruth Milkman, director of the UC Institute for Labor and
Employment and of the UCLA Institute of Industrial Relations.

Although health care is a major issue, the underlying cause of
the strike is the stores’ desire to destroy UFCW, she

Milkman finds the stores’ complaint that they must protect
themselves against the threat of competition, particularly from
Wal-Mart, ironic because there are currently no Wal-Marts in
Southern California.

Wal-Mart, the largest employer in the country, is not unionized.
They use “aggressive, anti-union policies” to
discourage employees from unionizing, said Wong.

Cashen said UFCW has been trying to unionize Wal-Mart employees
for the previous five years but that “it’s a
challenging project” because employees who wish to unionize
are met by opposition from the company.

According to the U.S. Bureau of Labor Statistics,
Wal-Mart’s staff costs are 70 percent of those of Kroger Co.,
the parent company of Ralphs.

Some people, such as Wong, have said companies such as Wal-Mart
are cheating tax-payers by forcing the government to pay for health
insurance because the companies will not supply it themselves.

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