[mgj-discuss] Post Article on possible UFCW strike

[Nihar Bhatt]

'+ac+'';}if (document.cookie.indexOf("WPATC") != -1){  var start = (document.cookie.indexOf("WPATC") + 6);  var end = (document.cookie.indexOf(";",start)) == -1 ? document.cookie.length : document.cookie.indexOf(";",start);  var cookie = document.cookie.substring(start,end) + ";";  while (cookie.indexOf(":") != -1)    cookie = cookie.substring(0,cookie.indexOf(":"))+";"+cookie.substring(cookie.indexOf(":")+1,cookie.length);  if (cookie.lastIndexOf(";") != cookie.length - 1) cookie += ';';  if (cookie.indexOf("=") == 0) cookie = cookie.substring(cookie.indexOf(";")+1,cookie.length);}else var cookie = "";var interstitial = 'dcopt=ist;'if ( ( typeof interstitialIsAllowed != 'undefined' ) &     ( !interstitialIsAllowed ) ){  interstitial = '';}//--> ';  interstitial = '';  if (debugAdCodeJsp) { adTag += debugTextArea(adTag); }  document.write(adTag);} // end show_doubleclick_ad}//--> ');}//-->washingtonpost.com 

Grocery Workers Try to Keep the Good Life 
Middle Class Could Be Out of Reach Under New Safeway, Giant Contract 
By Michael Barbaro
Washington Post Staff Writer
Monday, March 29, 2004; Page A01 

Six months after graduating from the District's Mackin High School in 1969, Glennis T. Mitchiner took a part-time job at a Safeway store in Northwest, bagging groceries to help pay his college bills.

Mitchiner realized that his full-time colleagues at Safeway were earning as much as many of the graduates at his college. So he quit school to work full time at Safeway, a job that provided the middle-class life a college degree had promised. He and his wife, who works at a Virginia computer software company, each earn about $45,000 a year, own a two-bedroom house, two Toyota sedans and send their daughter to a $3,000-a-year parochial school.

"I realized it from the get-go," Mitchiner said of his job. "This was a good deal." 

But what Mitchiner, now 53 and a cashier, views as a good deal, Safeway and unionized grocery stores across the country regard as a financial burden. Tomorrow, 18,000 Washington area workers at Safeway and Giant Food are to vote on a new jointly negotiated four-year contract that is expected to call for lower wages for new workers and reductions in health benefits, which the companies say they need to remain competitive with nonunion retailers such as Wal-Mart Stores Inc. If it is rejected, employees may vote to strike, disrupting business at 350 Giant and Safeway stores in the Washington area.

Contracts talks continued last night.

Both Safeway Inc. and the Dutch conglomerate Royal Ahold NV, which owns Giant Food LLC, have been struggling financially. Safeway lost $170 million in 2003 and $828 million in 2002. Ahold lost $807 million in 2002, the last full year it reported earnings. The company declined to say if Giant was profitable.

In less than a decade, the U.S. grocery industry has undergone wrenching changes. Independent regional chains in Washington, Philadelphia and Chicago have been gobbled up by big national and international companies, such as Safeway and Royal Ahold, which bought Giant Food in 1998. Today, grocery chains face a host of competitors, including Wal-Mart, bulk warehouse stores and gourmet food stores.

Consumers themselves, once loyal to their neighborhood supermarket, now shop around more in search of bargain prices and top quality. Even Mitchiner's wife, Michelle, shops at Wal-Mart. "I can get more for our money," she says, as her husband buries his face in his hands. Although the companies are proposing that new hires take the biggest hit, they are also asking employees like Mitchiner to accept some benefits cuts. "I resent it," he said. "I feel I earned these wages and benefits and I started to live accordingly."

A Stable Life 



Mitchiner and his five sisters grew up in a four-bedroom house in Northeast Washington. His father was a mail handler for the U.S. Postal Service and his mother cleaned houses along Connecticut Avenue. 

The Mitchiners advised their only son to finish Saint Anselm College in New Hampshire. But Mitchiner, worried about his parents' finances, moved back to Washington in 1970 and began working part time at Safeway. The next year he got a full-time job there. 

In 1987, Mitchiner, then 37, married Michelle. Four years later, they had a daughter, Lindsay. Complications from that pregnancy cost the couple $78,000 in hospital bills. The Safeway health insurance policy paid all the bills.

Mitchiner speaks fondly of many of his 34 years at Safeway. His house is full of photographs and plaques from the company. In 1990, Mitchiner graduated from Safeway's management training program. He was disappointed when he was not promoted to a senior management position. But he was pleased when, in 1994, he was chosen to don a tuxedo and introduce company executives at about 30 new store openings in the Washington area. He also would record a greeting to be played over the store's public address system at the openings. His nickname among his co-workers, Mitchiner said, was "The Voice of Safeway." 

In 2001, Mitchiner received the company's customer service award, given to employees who are found to consistently perform well by people hired by Safeway to test customer service.

Safeway, founded in 1914, was sold in 1986 to a small group of investors led by buyout specialists Kohlberg Kravis Roberts & Co. In 1992, Steven A. Burd became president of Safeway and since then has tangled with unions, as he laid off workers and cut other labor costs. 

Mitchiner said that over the years things have changed at Safeway. He still has the handwritten letter that the president of Safeway's Eastern division gave him in the mid-1990s, thanking him for coming to work when he was sick. In contrast, he said, when executives now visit his store, they don't greet him and the other cashiers. "It might seem like a minor thing," Mitchiner says, but not to him. 

In the mid-1990s, Mitchiner decided to run for an open shop steward position in his store and won. If there is a strike, Mitchiner will be a strike captain, meaning he must make sure his colleagues picket if they want strike pay, something he feels badly about because he knows some people will need to find other jobs. Mitchiner says he is planning to apply for part-time work as a security guard at MCI Center or try to get a job at Home Depot. Home Depot is not represented by a union, but he thinks they are hiring.

Talk of a strike upsets his wife. "Every time I mention it, she walks out of the room," he said.

"I get nervous," Michelle Mitchiner said. "To take what we're earning now and eliminate one of those salaries is scary."

The Bottom Line 



Economists describe Mitchiner's line of work as unskilled. But not Mitchiner. Before he could ever run a cash register, he had to memorize hundreds of product names and price codes, which he easily rattles off: 

Banana, 4011. Red Delicious apple, 4016. Granny Smith, 4017. 

Behind the register, wearing a black Safeway smock and cap, the 6-foot-6 Mitchiner says it often feels like he operates his own small business, with customers who rely on him to solve their problems. 

"Slide your card across like that," Mitchiner explained to a middle-aged man on a recent morning. "No, like this," he says, showing him again. Behind him, shoppers grow irritated. Eyes begin to roll, but Mitchiner just smiles.

Shoppers pepper Mitchiner with questions all day. Where is the low-fat salsa? When are chicken thighs going on sale? Why are pre-cut canned peaches out of stock?

He answers them all. As he sees it, he is what keeps customers coming back.

But as the grocery chains see it, Mitchiner, or at least costly employees like him, are part of their financial problem. Safeway pays Mitchiner $17.66 an hour and $35.32 for work on Sundays. Wages there are up to three times those of nonunion stores.

Under the contract approved four years ago, workers received an average annual raise of 40 cents an hour.

Safeway health care costs average about $17,000 a year for senior employees like Mitchiner, according to the contract. That is at least three times that of its competitors, according to Harry Burton, the chain's top negotiator. 

In addition, Mitchiner does not contribute to his pension, and Safeway guarantees him a fixed payment after he retires. In contrast, nonunion stores typically offer a 401(k) plan requiring employee contributions.

Some union members have complained that they are being asked to cut back, when top executives get substantial compensation. Burd, as Safeway chairman, was paid $1 million in 2003, although unlike previous years, he received no bonus or stock options. William J. Grize, the chief executive of American retail operations for Ahold, received $4.1 million in salary, bonus and pension contributions in 2002, the most recent year the company has made public filings. 

Mitchiner says his salary and benefits have provided his family with a comfortable lifestyle. They bought matching leather loveseats for their living room. They collect African art. They take vacations to Disney World. They splurge on dinner at Jerry's Seafood in Lanham and Benihana in Georgetown. 

Until recently, they often talked about moving into a bigger house with a larger kitchen and more closet space. "It was a starter home and I'm not satisfied," he said, waving his hand around the living room of his house in the District's Brookland neighborhood. "My wife considers it middle-class. I don't." 

But with a strike vote looming, that plan is on hold. 

Health Care Issues 



Burton says that Giant and Safeway's current benefits were conceived in a different economy, before health care costs soared, and in an era when Sunday was an insignificant shopping day.

Today Sunday is Safeway and Giant's busiest, but workers are still paid 11/5 to two times their hourly wage. Because of his seniority, Mitchiner's Sunday pay of $35 an hour is unlikely to be affected by a new contract. But the company has proposed that new employees receive only $1 or $2 more an hour on Sundays.

Currently there are two tiers for health care. About 92 percent of Giant and Safeway workers, including Mitchiner, pay no premium. They make modest co-payments for doctors visits, but those payments are capped at $100. 

Only about 8 percent of the employees have to pay any premiums. Part-time employees hired in 1984 or after must pay an average of $163 a month to cover other family members. If they only want to cover themselves, they do not have to pay a premium.

In the new proposals, the companies will seek further benefits cuts. They are expected to target the sharpest cuts for those hired after the contract is approved, creating an even wider gap between the companies' newest and oldest workers. A standoff over similar issues in Southern California led to a strike against Safeway and other grocery chains that lasted almost five months. Giant was not involved in those negotiations.

Mitchiner acknowledges that if he can get additional Sunday hours, he can probably handle the new health benefit costs. But he says he would feel badly voting for a contract that will hurt others.

So how hard will he fight? He says his family can probably go about two months without his paycheck. Looking at the California strike, he said, "Shoot, if I were out five months, I would take a contract like that."

Staff writer Neil Irwin contributed to this report. 



© 2004 The Washington Post Company 

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