Grocery Workers and the Collapse of the Middle Class

Sign the petition: Add your voice to support and demand respect for grocery workers.

Working in a grocery store used to mean a stable middle class living. That changed in Southern California with the creation of a two-tier wage structure in 2004. Those hired after the strike make significantly less than those employed prior and have a much harder time qualifying for health care benefits. It is the difference between a stable middle class existence and the high turnover of low-paying work that forces people to take multiple jobs to make ends meet.

You can see it in this video, created by UFCW. There are stark contrasts between those who have worked at these chains for decades and those hired after the strike and are now working two jobs.

This trend is not localized. From the AFL-CIO blog:

Of the 144 million jobs in the United States, nearly one in three of the total pays low wages—and often does not include affordable health insurance, paid sick days or retirement coverage. That eye-opening information, provided in a new report by The Mobility Agenda, finds these $11.11-an-hour-or-less jobs also tend to have inflexible or unpredictable scheduling requirements and provide little opportunity for career advancement.

The Mobility Agenda, a special initiative of Inclusion, a virtual think tank affiliated with the Center for Economic and Policy Research, finds that since 2001, there has been a sharp decline in wages for workers at the bottom third of the wage scale. Worse, reviewing the evidence on economic mobility, the authors of Understanding Low-Wage Work in the United States conclude:

In the U.S. labor market, it is not possible for everyone to be middle class, no matter how hard they work. Moreover, it has been getting harder to do over time.

Now that wages and benefits have dropped, turnover is up, way up. Only 15-23% of those in entry-level jobs are sticking around beyond a year. That is costing chains a lot of money on hiring and training costs. It was one of the biggest reasons why Stater Bros. came to an agreement with UFCW and eliminated the two-tier system.

Jack Brown, chairman and CEO of the Colton-based chain Stater Bros., said the increase in turnover was so stark at his chain that his company recently agreed to a new deal with the UFCW that gets rid of the two-tier system.

The company had adopted a two-tier plan when it agreed to abide by the 2004 contract reached by the union and the three major chains. This time, Stater Bros. decided to craft a deal separately from the chains.

While turnover continued to be low after the strike among longtime workers, Brown said, turnover for entry-level employees had doubled, from an annual rate of 25 percent to 50 percent.

Brown said the longer waiting period for pay raises and health benefits for those hired after the strike made it difficult to hire top-notch workers who want to make a career in the grocery business.

“We need to make sure we are attracting the best of the young people,” he said.

Experts estimate that it costs about $3,000 for grocers to hire and train new employees. The turnover was hurting Stater Bros.' bottom line. Workers are demoralized by working the same job as other colleagues, but earning way less. They are not qualifying for health care coverage. Out of 42,000-44,000 workers in the lower tier, only 3,800 have health care and only 75 have their dependents covered.

These workers are looking for respect and fair wages. Both tiers want to see equality in their pay. These CEOs are banking billions in dollars of profits, but their employees are struggling. They have fallen out of the middle class and are cycling in out of their doors.

Sign the petition: Add your voice to support and demand respect for grocery workers.

These workers are now under a three week contract negotiation. They have scheduled a strike vote for workers at Albertsons. It is the company they have been in negotiations the longest and have made the least progress with.