Business Update with Mark Lacter

Southern California could be in for another supermarket strike

KPCC's business analyst Mark Lacter talks about the prospect of another supermarket strike in Southern California

Kari Moran: On Tuesdays we talk about the latest business stories with Mark Lacter. Mark, is Southern California in for another supermarket strike?

Mark Lacter: Looks like it might happen as early as the first part of next week. On Friday, members of the United Food and Commercial Workers Union are going to be taking a strike authorization vote, but already they have the picket signs printed up and the strike captains are being briefed on what to do if there is a walkout. What’s interesting about this is they seem pretty reluctant, certainly more so than for the last big supermarket strike in 2003. Keep in mind that the existing contract with the major chains, Vons, Ralphs and Albertsons, expired in March. If a union really wanted to get tough with management, it probably wouldn’t be waiting five months to flip the switch.

Moran: Well, I guess it’s understandable why you wouldn’t want to strike in this economy…

Lacter: That’s right. Who wants to run the risk of being out of work for weeks or even months, especially since there probably wouldn’t be any shortage of people willing to cross a picket line? I mean the unemployment rate in LA County is still around 12-percent. And I’m not sure about the sympathy vote this time around. Whatever the contract offer includes or doesn’t include, it at least provides union members with a job, which is more than what many folks have these days. A job, by the way, that offers health care, which is more than what many employees in other industries receive.

Moran: Now, what about the supermarkets?

Lacter: A walkout is not a great prospect for them either. The last strike in 2003 was not only a financial disaster, but it really changed the shopping patterns for many consumers. The chains were willing to bite the bullet because it gave them some pretty significant concessions on health care coverage – basically, they created a kind of two-tier deal that lowers the benefits for future hires. This time, the two sides have a tentative pension deal, but that still leaves wages, workplace rules, and probably the biggest stumbling block: again, health care. It’s impossible to know what’s really happening at the bargaining table and what it might take for either side to agree. All that said, if there is a strike I’d be surprised if it were a long one because there’s just too much to lose for both sides.

Moran: Mark, aside from the grocery workers, is anyone else talking strike?

Lacter: Well, you have several hundred ushers and ticket sellers at Angels Stadium. They are not happy about the team deciding to freeze their wages and they’re threatening to walk off the job. But otherwise, it’s pretty quiet. Last March, the Writers Guild quickly reached a deal with the Hollywood studios on a three-year contract. That, by the way, is the same Writers Guild that went out on strike for more than three months in 2007 and caused quite a bit of turmoil throughout the industry. The dockworkers signed a six-year contract in 2008, so you won’t see many labor issues over at the ports for quite a while. You know, occasionally you’ll see work stoppages involving hospital workers or janitors but, in general, full-scale strikes are definitely the exception these days.

Moran: Well here's the $64,000 labor question: why does that happen?

Lacter: Well, part of it is the struggling economy but the reality, Kari, is that there just aren’t many unions anymore to strike. Membership last year was around 12 percent of all employees - that’s half what it was in 1983. The other reality is that strikes don't work very well anymore. Companies have just too many options – they can relocate overseas, bring in replacement workers, or just buy equipment that requires fewer people. The one exception to this has been the public sector unions, which here in L.A. have seen their wages and benefits, in general, go well beyond what’s available in private industries. But even here, we’ve seen some pushback because of budget shortfalls and that's led to some concessions, though so far they've been pretty modest.

Moran: Thanks, Mark.

Lacter: Thanks, Kari.

Moran: Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.


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