Tuesday, October 22, 2013

Assorted Thoughts on the Seattle/Tacoma UFCW non-strike

Unionized workers at several grocery store chains--Safeway, Albertson's, and the Kroger-owned Fred Meyer and QFC--will stay on the job after negotiators reached a tentative agreement last night. The main sticking point seems to have been health insurance coverage for part time workers. The current contract provides some level of insurance to part-time employees working 16 hours per weekweek. Management sought to limit insurance coverage to employees who 30 hours per week, those who meet the definition of "full-time" under the Affordable Care Act, commonly referred to as Obamacare.
  • Management's position here is similar to, though less generous than, Trader Joe's. TJ's decided to give its part-time employees $500/year to purchase insurance on the exchange while dropping their employer-sponsored insurance coverage. They claim that for part-time workers for whom the job at TJ's is their only job, this is a much better deal. It's quite possible they're correct.
  • Simply dropping employer-sponsored coverage in exchange for nothing is a raw deal. It's just a reduction in compensation. If management had been offering a raise, that would be different, but instead they were trying to cut entry-level wages and eliminate paid sick leave.
  • Economists like to say that benefits are "compensation", and that any cut in benefits should  result in higher cash wages for workers. While that may be true in the long term, it's not always going to be true in the short term.
  • If the we want some or all of surplus generated by insurance cuts to flow to workers, we need to think about how to boost employee bargaining power, which has drastically deteriorated in man job sectors over the last fifty years.
  • Unions whose employees are likely to qualify for subsidized insurance ought to think about fighting for higher cash wages, or defined-benefit pensions, rather than non-cash compensation.
  • Employers who can easily rely on part-time workers, such as retailers, can engage in all sorts of scheduling games to prevent employees from qualifying for benefits. Requiring employers to provide benefits for part-time workers prevents them from wasting managerial time and effort playing these games.
  • This whole episode could be avoided, or at least mitigated, by replacing the 30-hour cliff with some measurement of full-time equivalents and require a certain level of insurance per FTE.
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