Lessons from the Picket Line

Editor's Note: A version of this commentary ran in the L.A. Times on March 3.

The 60,000 grocery workers who went on strike almost five months ago have reluctantly ratified a contract that most consider a setback in terms of their wages and benefits. In Los Angeles and around the country, the labor movement and its allies hoped the strike would be settled on the union's terms -- without significant givebacks. Instead, employees will now shoulder increased costs for health care benefits and a "two-tier" wage system will bring new hires in at dramatically reduced levels.

United Food and Commercial Workers (UFCW) members and others in the labor community are asking themselves whether this result was inevitable -- the inexorable logic of economic forces over which neither the grocery chains nor the union had control -- or were there strategic missteps that could have been avoided. In other words, had the UFCW done things differently, could they have won the strike?

The answer is important because unions throughout the country will be looking at the strike and drawing lessons from it. The grocery chains are feeling their oats from this contract settlement. They have other union contract negotiations coming up around the country, including in northern California in September. They, and the business community in general, hope that the recent settlement scares the hell out of other unions. They hope that unions throughout the country accept that "givebacks" are now unavoidable. Will the grocery chains' victory intimidate other unions from using the strike as a strategic tool? Will it discourage workers in non-union workplaces from joining unions? What should they learn?

Heading into the conflict last fall, the three giant supermarket chains had most of the advantages. The Cincinnati-based Kroger Co., which owns Ralphs, is the nation's eighteenth-largest company, with revenues of more than $51 billion. Albertson's, Inc. based in Idaho, ranks thirty-fifth, with revenues of $36 billion. Safeway, which owns Vons and Pavilions, and is based in Pleasanton, California, ranks forty-first, with revenues of $32 billion. These chains understood that while the UFCW is a national organization with over a million members, the main battlefield would be with the seven independent and often quarrelsome union locals in Southern California. The union is highly decentralized. Dozens of distinct locals around the country bargain separate contracts many with different contract expiration dates, salary and benefits levels and workplace rules.

Throughout southern California, the public was obviously very sympathetic with the strikers. The chains lost about $2 billion of business as consumers shifted to less convenient stores. Supporters joined picket lines at stores throughout the region. But the focus on Southern California region was inadequate. In a classic divide and conquer strategy, the stores calculated well in advance that they could take billions of dollars in losses in their Southern California stores but cushion their losses by operating unimpeded throughout the rest of the country. The three chains have a total of 6530 stores nationwide, while workers in only 860 stores in Southern California were on strike. The corporate chains convinced most institutional investors that they could amortize any losses over a period of years if they could beat down their labor costs significantly nationwide by starting in California. The grocery chains knew that the UFCW had a limited strike fund. Employees need to work or risk losing their homes, their health insurance and their kids' college tuition.

There is a reason why the United Auto Workers negotiate a national contract that covers all locals and the three major automobile manufacturers under one agreement. It keeps the employer from playing one small local off against another, utilizing givebacks from one group to pressure the same from another.