Posts tagged ‘UFCW’

Another Possible Reason for Obama's Minimum Wage Push

Obama's minimum wage push could be an honest attempt to reduce poverty, but since only a trivial percentage of the American work force earns the minimum wage, and most of those are in starter jobs rather than trying to support a family, it does not make a lot of sense.

On the other hand, it could be another cynical payoff to unions that form the backbone of Obama's political support

Organized labor's instantaneous support for President Obama's recent proposal to hike the minimum wage doesn't make much sense at first glance. The average private-sector union member—at least one who still has a job—earns $22 an hour according to the Bureau of Labor Statistics. That's a far cry from the current $7.25 per hour federal minimum wage, or the $9 per hour the president has proposed. Altruistic solidarity with lower-paid workers isn't the reason for organized labor's cheerleading, either.

The real reason is that some unions and their members directly benefit from minimum wage increases—even when nary a union member actually makes the minimum wage.

The Center for Union Facts analyzed collective-bargaining agreements obtained from the Department of Labor's Office of Labor-Management Standards. The data indicate that a number of unions in the service, retail and hospitality industries peg their base-line wages to the minimum wage.

The Labor Department's collective-bargaining agreements file has a limited number of contracts available, so we were unable to determine how widespread the practice is. But the United Food and Commercial Workers International Union says that pegging its wages to the federal minimum is commonplace. On its website, the UFCW notes that "oftentimes, union contracts are triggered to implement wage hikes in the case of minimum wage increases." Such increases, the UFCW says, are "one of the many advantages of being a union member."

The labor contracts that we examined used a variety of methods to trigger the increases. The two most popular formulas were setting baseline union wages as a percentage above the state or federal minimum wage or mandating a flat wage premium above the minimum wage.

Decoding a Wal-Mart Ban

From the USA Today:

The City Council here voted late Tuesday to
ban certain giant retail stores, dealing a blow to Wal-Mart's potential
to expand in the nation's eighth-largest city.

The measure, approved on a 5-3 vote, prohibits
stores of more than 90,000 square feet that use 10% of space to sell
groceries and other merchandise that is not subject to sales tax. It
takes aim at Wal-Mart (WMT) Supercenter stores, which average 185,000 square feet and sell groceries....

Supporters of the ban argued that Wal-Mart puts
smaller competitors out of business, pays workers poorly, and
contributes to traffic congestion and pollution. Opponents said the
mega-retailer provides jobs and low prices and that a ban would limit
consumer choice.

Certainly such a ban represents a total disdain for consumers and a populist political stunt to cash in on fashionable Wal-mart bashing.  But what is really behind the ban?

A Wal-Mart Super Center differs from a large Wal-Mart mainly in that is sells groceries.  And in fact the legislation does not ban all super-large stores, just ones that sell groceries (Wal-Mart could still build a super-honkin large store in San Diego as long as it didn't sell food).  Well, this should give us a clue.  It tells us that the politicos are not against large stores, just against large new stores that compete with existing grocery stores.

And this puts the lie to supporters statements that their concern is that Wal-Mart "puts smaller competitors out of business."  There aren't any "smaller competitors" in California grocery stores, they are all large chains run by corporations.  And if there are any local fresh produce shops out there, I don't think their customer base is one to run off to Wal-Mart.  This is about protecting grocery retailers from competition.  Why?  Well, there is one other thing we need to know, and that is that California grocers all have extremely powerful and politically connected unions.  This is a story from the LA Times way back in 2003:

Inglewood seemed to offer the perfect home for a new Wal-Mart
Supercenter, with low-income residents hungry for bargains and a mayor
craving the sales-tax revenue that flows from big-box stores.

But nearly two years after deciding to build on a 60-acre lot near
the Hollywood Park racetrack, Wal-Mart is nowhere near pouring
concrete. Instead, the world's biggest company is at war with a
determined opposition, led by organized labor.

"A line has been drawn in the sand," said Donald H. Eiesland,
president of Inglewood Park Cemetery and the head of Partners for
Progress, a local pro-business group. "It's the union against Wal-Mart.
This has nothing to do with Inglewood."

Indeed, similar battles are breaking out across California, and
both sides are digging in hard. Wal-Mart Stores Inc. wants to move into
the grocery business throughout the state by opening 40 Supercenters,
each a 200,000-square-foot behemoth that combines a fully stocked food
market with a discount mega-store "” entirely staffed by non-union
employees. The United Food and Commercial Workers and the Teamsters are
trying to thwart that effort, hoping to save relatively high-paying
union jobs.

The unions have amassed a seven-figure war chest and are calling
in political chits to fight Wal-Mart. The giant retailer is
aggressively countering every move, and some analysts believe that
Wal-Mart's share of grocery sales in the state could eventually reach
20%. The state's first Supercenter is set to open in March in La
Quinta, near Palm Springs....

Yet the Supercenters also threaten the 250,000 members of the UFCW
and Teamsters who work in the supermarket business in California.

For decades, the unions have been a major force in the state
grocery industry and have negotiated generous labor contracts. Wal-Mart
pays its grocery workers an estimated $10 less per hour in wages and
benefits than do the big supermarkets nationwide "” $19 versus $9. As
California grocery chains brace for the competition, their workers face
severe cutbacks in compensation.

"We're going to end up just like the Wal-Mart workers," said Rick
Middleton, a Teamsters official in Carson who eagerly hands out copies
of a paperback called "How Wal-Mart Is Destroying America." "If we
don't as labor officials address this issue now, the future for our
membership is dismal, very dismal."

The push for concessions has already started, prompting the
longest supermarket strike in Southern California's history. About
70,000 grocery workers employed by Albertsons Inc., Kroger Co.'s Ralphs
and Safeway Inc.'s Vons and Pavilions have been walking the picket
lines since Oct. 11, largely to protest proposed reductions in health
benefits. The supermarkets say they need these cuts to hold their own
against Wal-Mart, already the nation's largest grocer.

Rick Icaza, president of one of seven UFCW locals in Southern
California, has taken issue with much of the supermarkets' rhetoric
since the labor dispute began. But he doesn't doubt that Wal-Mart is
the biggest threat ever posed to the grocery chains "” and, in turn, his
own members.

"The No. 1 enemy has still got to be Wal-Mart," he said.

The unions and their community allies have stopped Wal-Mart in
some places and slowed it down in others. They have persuaded officials
in at least a dozen cities and counties to adopt zoning laws to keep
out Supercenters and stores like them.

Hat tip to the Mises blog, which has more here.  In 2004 I wrote how the California grocery unions were using the state pension fund (Calpers) to support their strike.

A Nice Irony

With a hat tip to Cafe Hayek, comes this article from the Las Vegas Weekly:

The shade from the Wal-Mart Neighborhood Market sign is minimal around noon;
still, six picketers squeeze their thermoses and Dasani bottles onto the dirt
below, trying to keep their water cool. They're walking five-hour shifts on this
corner at Stephanie Street and American Pacific Drive in Henderson"”anti-Wal-Mart
signs propped lazily on their shoulders, deep suntans on their faces and
arms"”with two 15-minute breaks to run across the street and use the washroom at
a gas station....

They're not union members; they're temp workers employed through Allied
Forces/Labor Express by the union"”United Food and Commercial Workers (UFCW).
They're making $6 an hour, with no benefits; it's 104 F, and they're protesting
the working conditions inside the new Wal-Mart grocery store.

"It don't make no sense, does it?" says James Greer, the line foreman and the
only one who pulls down $8 an hour, as he ambles down the sidewalk, picket sign
on shoulder, sweaty hat over sweaty gray hair, spitting sunflower seeds. "We're
sacrificing for the people who work in there, and they don't even know it."

The union accuses Wal-Mart of dragging down wages and working conditions for
other grocery-store workers across the nation. "Whether you work or shop at
Wal-Mart, the giant retailer's employment practices affect your wages. Wal-Mart
leads the race to the bottom in wages and health-care," says the UFCW's website.
"As the largest corporation in the world, Wal-Mart has a responsibility to the
people who built it. Wal-Mart jobs offer low pay, inadequate and unaffordable
healthcare, and off the clock work."

But standing with a union-supplied sign on his shoulder that reads, Don't
Shop WalMart: Below Area Standards, picketer and former Wal-Mart employee Sal
Rivera says about the notorious working conditions of his former big-box
employer: "I can't complain. It wasn't bad. They started paying me at $6.75, and
after three months I was already getting $7, then I got Employee of the Month,
and by the time I left (in less than one year), I was making $8.63 an hour."
Rivera worked in maintenance and quit four years ago for personal reasons, he
says. He would consider reapplying.

LOL.  Frequent readers will know that I usually feel the need to restate the moral of the story to insure everyone gets it.  I don't think thats necesary here.  More on Walmart and wages here and here.