US grocery strike ends
New contract deals ends 20 week lockout
March 1 2004
Supermarket workers in California have agreed a new contract that puts an end to the longest grocery strike in US history.
The 20 week lockout of workers by three major chains, Kroger, Albertsons and Safeway centered on the supermarket’s plan to change contract terms for new workers.
In the face of Wal-Mart’s decision to target the state for growth of its Supercenter format, the supermarkets have argued they need to be more competitive.
The dispute hinged on the issue of health care, with the supermarkets saying they could no longer afford to pay benefits without contributions from workers.
Under the new three-year agreement, current union members will not have to make any contributions toward their health care plans in the first two years and will pay a contrinution in the third year if reserves do not cover health care costs.
Crucially, the deal also changes the arrangements for new employees, who will receive less pay and fewer benefits. New employees will have to pay about $9 a week for a health care plan, and will earn less than the average wage of $12 to $14 an hour earned by current employees.
In addition, the supermarkets will contribute 35 per cent toward employee pensions for new employees, compared to 65 per cent for current employees.
Members of the United Food and Commercial Workers Union voted to accept the new deal by around 86 per cent.
Almost 900 stores were affected by the strike and lock-out, at an estimated sales cost of more than $1bn to the supermarkets.
