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Rising Health-Care Costs at Heart of Labor Strife

October 14, 2003|Nancy Cleeland and Marla Dickerson | Times Staff Writers

When Southland supermarket workers went on strike Saturday, their main beef was an employer proposal to cut back their health plan. Mechanics with the Metropolitan Transportation Authority are squawking over the same thing. And health benefits are key to the contract fight that has prompted a sickout by Los Angeles County Sheriff's deputies.

Around Southern California and across the country, attempts by employers to curtail medical benefits have become the top issue in labor contract talks, setting off a wave of strikes and other job actions that are likely to escalate as health insurance costs continue to balloon.

"It's at the core of every major contract struggle," said Kate Bronfenbrenner, director of Labor Education Research at Cornell University. "And it's going to be an issue until we see some national solutions."

In fact, at least half the strikes in California this year have been staged over health benefits, according to Ken Jacobs, a researcher at the UC Berkeley Labor Center. He counted 11 such work stoppages in a four-month period this year in Northern California.

They have affected the public and private sector, small and large employers, skilled and unskilled workers. At a Dodge dealership in Colma, 15 mechanics are walking the picket line to fight for their health benefits. In Southern and parts of Central California, 70,000 supermarket workers are doing the same.

Those workers join wireless technicians, auto workers and other union members nationwide who have agreed to wage freezes and plant closings but draw the line at paying more for health insurance.

Michael Rosales, a Ralphs meat cutter for nearly three decades, has a daughter who seven years ago was found to have a brain tumor. "To this day," Rosales said, "she's on medication that would probably break us without this plan. That's why if I have to stand on a picket line to fight for these benefits, I will."

There are scores of stories like his among the pickets in front of Vons, Pavilions, Albertsons and Ralphs stores from San Luis Obispo to the Mexican border. A mother whose two young children suffer from kidney problems. A diabetic. A cancer survivor.

They speak gratefully of a health plan that they know is among the finest in the country for hourly service workers. Those benefits, many say, have kept them on the job and loyal to their companies despite unpredictable part-time hours.

Employers, however, say health-care cost increases are so extreme that they can no longer afford to soak them up unilaterally. The supermarket chains, in particular, say they are facing a double whammy of soaring insurance premiums and intense pressure from nonunion retailers to lower their prices.

"It doesn't surprise me that the union is trying to hang on" to such rich benefits, said Jim Foreman, managing director of health and welfare for Towers Perrin, a New York-based human resources consulting firm. "But it's just not realistic. No employer can continue to absorb the double-digit increases we've seen in health-care costs over the past few years or expect to pass them along to customers.... The [profit] margins, especially in the grocery business, just aren't high enough."

Still, many of the grocery workers represented by the United Food and Commercial Workers union view the markets' proposal to cut health benefits as a betrayal, a reneging on a deal. Through decades of hard bargaining and strikes, the UFCW in Southern California won what is widely regarded as a Cadillac contract.

Workers pay no premium for full family health insurance -- a perk enjoyed by workers at only 4% of large employers nationwide, according to a survey by the Kaiser Family Foundation, an independent research group not affiliated with managed-care provider Kaiser Permanente.

The benefit is particularly unusual for the retail industry, whose wages and benefits tend to lag behind those of other industries, according to the study's author, Gary Claxton.

"It's extremely uncommon," Claxton said. "It's hard to think of any industry [that supermarket workers] could go to ... to get that good a health insurance package with no contribution."

The big supermarket chains -- Ralphs parent Kroger Co., Albertsons Inc. and Safeway Inc., which owns Vons -- pay their health-care contributions into a trust fund that is jointly administered by the union and the companies. Through recent contracts, the employers have pledged to contribute whatever it takes to maintain benefits at current levels. These include dental and vision care, as well as a full health plan at Kaiser or through another HMO.

The amount of contributions has fluctuated in the last decade, with cost-containment measures such as limiting chiropractic care added over time.

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