Return to regular viewMore labor conflicts expected over health care costs
ALEX VEIGA, AP Business Writer
Saturday, October 18, 2003
©2003 Associated PressURL: sfgate.com/article.cgi?file=/news/archive/2003/10/18/state1705EDT0086.DTL
(10-18) 00:03 PDT LOS ANGELES (AP) --
When West Coast longshoremen and shipping companies ended their labor dispute in January, union officials boasted that the new contract would set a standard for organized labor.
Among its provisions was no-cost health insurance, prompting an AFL-CIO official to remark that longshoremen "won a historic contract which sets a much-needed benchmark in health care, pensions and living standards."
For many of the country's workers that benchmark is already shifting, as employers face soaring health care costs and ask workers to shoulder a greater share of the burden. Workers are resisting, giving rise to labor conflicts in California and elsewhere.
Striking grocery workers and public transit mechanics have caused widespread inconvenience and economic losses in Southern California, while Los Angeles County sheriff's deputies on a mass sick-out have forced lockdowns at county jails and court hearings to switch to neighboring counties.
Thousands of Kroger Co. grocery workers walked off the job in West Virginia, Ohio, Kentucky and Missouri this week.
Each union is fighting to retain top-of-the-line medical benefits.
Several labor experts said this week's strikes are part of a growing trend, one that increasingly pits cost-conscious employers against workers seeking to hang on to their most important benefit.
"Unless there's some change in legislation that completely redefines how health care gets delivered, I think we're going to see this time and time again as a labor issue," said Edward Lawler, a business professor at the University of Southern California.
A sluggish economy, a poor labor market and the highest annual increases in health care costs in a decade over the past two years have prompted employers across the country to focus on health benefits as a logical place to save money.
"This is a front-burner issue everywhere," said Sandra Calderon, spokeswoman for Safeway Inc.'s Vons stores, one of three supermarket chains whose grocery clerks went on strike this week in Southern California. "We have a lot of nonunion competition with much lower labor costs, and it's time we address that issue."
United Auto Workers members working for U.S. car makers managed to retain most of their health benefits by the end of contract negotiations last month. But they had to give in on other issues, including generous wage increases, layoffs and plant closings.
And months after thousands of General Electric Co. workers staged a two-day walkout to protest increases in their health care copayments, three unions signed off on a new contract in June that provided some increases in health care premiums.
"In some cases, workers could have probably gotten higher wages had they not had to bargain for health benefits," said Ron Blackwell, director of corporate affairs for the AFL-CIO.
In 2002, the cost of providing employee health care rose faster than at any time since 1990, according to a survey of 2,900 public and private employers conducted by Mercer Human Resource Consulting, a unit of New York-based Marsh & McLennan Cos.
The average total health benefit cost per worker rose 14.7 percent last year, from $4,924 per employee to $5,646. Employers projected their health care costs would jump an average of 14 percent this year, according to the survey.
Between 1987 and 2000, private business spending on health care rose at an average annual rate of 8 percent, according to the nonprofit Employee Benefit Research Institute, based in Washington, D.C.
"Employers are having to do something because of the rapid increase in costs, and they're moving to cost-sharing," said Alwyn Cassil, spokeswoman for the Washington-based Center for Studying Health System Change.
That means asking workers to pay higher premiums for coverage and deductibles for doctor visits and hospital stays.
On average, employees nationwide pay about 16 percent of the cost of single coverage and about 27 percent of the cost of family coverage, Cassil said.
California's striking workers are trying to preserve work agreements that offer much better benefits. The 70,000 grocery workers in Southern and Central California, for example, pay nothing for their health insurance and only a $10 copay for a doctor visit or prescription.
"That's unheard of today," said Calderon, the Vons spokeswoman. "Everyone pays or shares their cost of their health care, and more and more companies are asking their employees to do that."
Members of the United Food and Commercial Workers union who work in the Southern California grocery stores say they remain determined to keep their premium health care coverage, even if it's a benefit few other workers enjoy.
"We work hard for what we get," said Rodden Eltanal, 27, who works at a Ralph's supermarket in Los Angeles.
He said his co-workers fear that if they agree to start paying for their health insurance, the companies will only try to raise their costs in the future.
"Once they get you, they're going to get you again," he said.
Grocery employees make $15 an hour on average. The companies want them to pay a weekly premium for health care -- $5 for an individual employee, $15 to cover an employee and his or her family, Calderon said.
The more than 3,000 Kroger grocery workers on strike in the Midwest and South claim they would have to pay up to $100 more per week under the terms of the company's pre-strike contract offer.
The chains say they must cut health care costs to compete with superstores that offer groceries and other retail items. Their fiercest competition is coming from Wal-Mart Stores Inc., which has opened Supercenters throughout the country.
Union leaders maintain the grocery chains are making enough money to continue the premium health benefits.
"They're trying to shift these costs because they believe they can, not because they have to," said the AFL/CIO's Blackwell.