THE WAR OVER HEALTH CARE
By David Bacon
LOS ANGELES, CA (1/17/04) -- Today Mark Norton is one of
70,000 workers forced on strike, or locked out, in southern
California. Soon he may be one of hundreds of thousands more facing
the same difficult predicament.
Across the country, the system for financing health care
benefits for union workers is breaking down, as managed care drives
the cost of medical insurance through the roof. Some employers, like
Safeway, which owns the Von's store where Norton works, can pay the
increases from rising profits, but they won't. Whether from greed or
economic pressure, the growing crisis of this system threatens to
make 2004 a year of massive strikes and labor wars.
Over 40 million people in the US have no health insurance.
That makes the benefit Norton is fighting to save not a perk or a
luxury, but a vital necessity. Protecting it has already cost him
three months on the picket line, and promises to cost even more.
Norton went to work for Von's eighteen years ago. By last
fall, when the strike started, he'd become a grocery manager. That
gave him a full-time job, earning wages capable of supporting a
family, in an industry where that's become a rarity. The retail
industry nationally pays close to minimum wage for most workers,
offering jobs with little security to an overwhelmingly young
workforce. In this industry, union supermarket workers have been
able to maintain a better standard of living than most, yet over
three-quarters of the baggers, checkers, and stock clerks who make LA
supermarkets function have trouble accumulating the work hours they
need to survive. In a fairer world, they would be striking for more
fulltime jobs, at higher wages. But when Norton walked out of Von's
on October 11, it was over Safeway's demands to make life even harder.
The chain demanded for the first time that existing employees
begin paying for their health insurance. "They said they were just
asking for $5 a week, or $15 for family coverage. When we did the
numbers, it turns out it could cost as much as $95 a week by the end
of the contract," he explains. The average weekly wage for a Los
Angeles supermarket worker is $312.
In each of the last three years, the premiums charged by
private health insurance plans have gone up 15%; the predicted future
rise is 12-14% annually. Safeway wants to cap it's contribution,
which would leave workers paying for those hikes.
An even bigger threat was Safeway's proposal to begin hiring
new workers at lower wages, with an insurance plan most wouldn't be
able to afford. Safeway says it wants to pay $1.35 an hour for their
medical care. The company pays about $5.00 an hour for its current
employees. If new hires don't go into the existing plan, as the
workforce it covers grows older, they will become more expensive to
insure, and their premiums will rise for that reason also.
Meanwhile, few new hires will be able to pay the difference between
the company's contribution and the actual cost of health insurance
Safeway is offering no wage increase to anyone, and proposes
to pay new hires $3.00/hour less, at the top rate. "They want a
two-tier system, where they can bring in new employees at several
dollars less an hour with little to no benefits at all," Norton says.
"A lot of us believe they'll weed out the rest of us once they hire
these new employees. That's why I volunteered to go to Northern
California, to picket stores there."
Once Norton and his coworkers struck, the two other large
grocery chains in southern California, Albertsons and Ralph's (a
division of Kroger Stores), locked out their own workers in a common
front with Safeway. This long-standing practice is now being
investigated by California Attorney General Bill Lockyer as a
possible violation of anti-trust laws.
The three chains say they need concessions in order to
compete with the world's largest corporation, Wal-Mart. Not only
does Wal-Mart pay close to minimum wage, but its health plan is so
expensive that most employees can't purchase coverage. They get
their medical care either through another family member working
elsewhere, in the local emergency room, or not at all. Wal-Mart's
lower wages and benefits have made the company one of the most
important organizing targets of the UFCW and the AFL-CIO.
Nevertheless, a union contract there is still a long way off.
Safeway and the other two grocery chains claim Wal-Mart
represents an immediate threat to their market share. Yet most
southern California Wal-Marts don't sell groceries, and even if the
company carried through on its announced plans to build 40 "super
centers" throughout the state, it would only gain 1% of its grocery
market, compared to the 60% held by the big three.
Norton and other strikers extended their picket lines to
other areas of the state, where they say they've found a sympathetic
public. Supermarket workers -- mostly young, and often people of
color -- meet and talk with store customers all the time. Their
predicament bears a familiar human face. But solidarity also has
another source. This year workers in other unions, from hotel room
cleaners to hospital nurses and dieticians, are going to face similar
demands from their employers. "We're expecting a major confrontation
with hotel chains over health care costs when our contract comes up
this summer," says Mike Casey, president of San Francisco's Local 2
of the Hotel and Restaurant Employees. The Service Employees Union
will be negotiating with hospital chains in all major west coast
cities this year as well, and health care costs will be the number
one economic issue.
Northern California's 50,000 supermarket workers are watching
with the most concern -- their contract is up in September. "We
certainly expect this fight to be on our doorstep then," says Rich
Benson, president of UFCW Local 870. "That's why our local unions
fully support the efforts of unions in southern California. Safeway
has contracts from Virginia, to Colorado, Washington, and Nevada.
This is a watershed moment, not just for the UFCW, but for the whole
The immediate fights this year seem almost unavoidable, but
the pressure of rising healthcare insurance rates won't stop there.
Unions are already spending millions of dollars on strike benefits
and expenses, with more to come, while workers are bearing the brunt
of lost wages. The cost could be even higher, if any of these
strikes are lost, or unions broken.
California labor took a step towards a longer term solution
to this problem, by pushing legislation this fall to begin taking
healthcare costs out of competition. Just before being recalled,
ex-Governor Grey Davis signed a bill, SB-2, which requires large
employers to provide healthcare coverage for their employees.
Another bill to establish a single-payer system, using the money now
spent on health insurance premiums to extend care to all
Californians, was introduced but didn't come up for a vote.
Unions, which supported the more limited SB-2, will have
their hands full this year just hanging onto it. Newly-elected
Governor Arnold Schwarzenegger, speaking for the state's largest
employers, has already promised to place an initiative on the ballot
to repeal SB-2, and is collecting millions of dollars in corporate
campaign contributions. But the initiative could backfire. If
unions and communities organize a coalition powerful enough to defeat
him, the momentum could not only preserve SB-2, but put single-payer
on the agenda.
California corporations are making it impossible for unions
and workers simply to maintain the status quo. Instead, employers
are gearing up for a protracted and interminable war to dump onto
them the system's rising costs, or force them to do without
healthcare entirely. "I'd like to ask Steve Burd (Safeway's CEO) at
what point in his life he stopped caring about people and only about
money," Norton asks angrily. "How can he tell his stockholders that
putting 80,000 people on the street is an investment in their future?
No one's going to get rich doing our job. We just want to make a