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[8 comments]

Grocery store workers go on the dole as wages fall

June 11, 2014

A new report by the University of California, Berkeley Food Labor Research Center's Saru Jayaraman and UC Davis professor Chris Benner ties the state's growing number of grocery industry workers receiving public assistance to declining wages within the industry.

The report involved interviews with 925 people employed by supermarket chains, ethnic markets and big box operators such as Walmart and Target. It found that roughly one in three people working in the industry is receiving some type of assistance and that one in five rations their food.

The research, which was commissioned by the United Food and Commercial Workers Western States Council, found the median wage at unionized stores fell from $19.38 in 2000 to $15.17 an hour in 2012. The median wage for non-union workers was below $10. Company profits grew an average of two percent a year during the same period.

"The grocery industry was once seen as a reliable source for middle-class jobs in this state — workers could buy a house, put their kids through college, retire with a comfortable income," said Jim Araby, executive director for the UFCW's Western States Council, in a statement. "That these things are no longer possible, and low-wage workers are being squeezed to the point of seeking out public assistance even as their employers grow richer, points to a broader problem in our state."

The report calls for support for unions and living wage public policies as a two-pronged approach to reversing the current situation.

Discussion Questions:

What economic and competitive pressures are causing grocery worker wages to fall? Do you agree with the report authors that more support is needed for unions and living wage public policies to correct the situation?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Do you agree or disagree that more support is needed for grocery worker unions to assure a fair living wage for employees?

Comments:

This study focuses on California, where there is an ongoing debate about raising the minimum wage. Regardless of industry, a minimum wage in California does not allow people to purchase a home in any urban area and have a reasonable standard of living.

On the one hand, consumers want low prices. On the other hand, wages are a significant part of operating costs and grocers, as well as other retailers, want to keep wages low when margins are small. That results in employees who do not have a living wage.

There is a stalemate. As it is, if employees can not live on what they earn working full time, there are more people applying for assistance from government. Who will blink first? Who will examine how some retailers can pay above the current minimum wage and stay profitable?

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Um ... let's see ... if you don't pay people enough to live on they need to turn to an alternative revenue stream like say, crime or public assistance. Seems pretty self-evident to me.

Will unions help? I suppose they could in some cases, but it seems to me there is a simpler non-union fix. Raising the minimum wage may or may not help depending on the final impact on cost of living.

A more interesting idea is to tie wages to productivity/profitability metrics, essentially letting workers earn as much as they can provided the overall enterprise is hitting its financial targets.

It's an idea I floated to the UFCW in Illinois prior to the Walmart entry into Chicago and (hindsight being 20/20) would have (at least in that case) saved jobs, saved companies and increased annual take-home for employees.

Needless to say they didn't take me up on it.

I'm convinced a variation on the theme would still work provided management would have the stomach for a scenario in which a clerk might make as much or more than an executive, at least for a quarter or two.

The bottom line is that working at retail still isn't looked at as a profession once you get below the management ranks. I suspect until that changes, we'll still be writing about this topic.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Seems to be a theme today, as a pricing article about supermarkets also is on the docket. I don't know of any store owner who doesn't want to compensate their employees with great pay and benefits. The problem is quite simple. Revenues are not rising quick enough to compensate the employees in a way to keep them off government assistance.

The cost of doing business, with ACA, higher taxes across the board, and competition from dollar stores, and drug marts, has lowered profits big time. We haven't kicked in the full weight of the ACA yet, and who knows what other legislation in the future will hurt the bottom line. Grocery stores sell commodities, which are sold everywhere including online, and profits will be squeezed to the point where labor costs become an issue.

The unions helped push thru legislation in Ohio to index the minimum wage to inflation every year, and that my friends is gong to costs jobs, especially for young kids. In about 5 years our minimum wage could be around $9.25, and add in the spiraling effect of your senior workers, what is a retailer going to do? Yes he'll have to cut hours, and seek out ways to offset that, which is nearly impossible right now. Many of us as owners have learned to live with less profit as we value our workers, but someday down the road, making a profit will become very difficult as the big chains will be even bigger, and make it tough for us to continue on.

For those who feel this is sour grapes, or a doomsday prediction, it is not. This is my honest belief, as consumers today have figured out where to buy goods for next to nothing, and that is how it is going to be, with mobile price checker services blossoming. There will be winners and losers in this game, and my advice is to learn how to carve your niche, and keep the best employees around, who can make you money.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

I fully understand employing people that can't afford to shop where they work as in planes, trains and  the like. But bringing people on board for an hourly wage that can never over any amount of time accumulate to the funding necessary to sustain a minimum living condition for a single person is considered by more and more to be a return of subjugation, or at the very least, selective depravity.

What I find to be most perplexing in this practice is how the corporate ownership and or executives are aloof to the ramifications of these elective decisions. The low wage employee is a customer and or referral for any and all companies. The way they are treated is the way they, their family, and friends will patronize and recommend.

The next secret up for exposure is how cost of goods sold includes tax increases for the company and its ownership. If something isn't done, these very issues raised with an exposé of who upholds these conditions might even change the way the taxpayers vote, maybe like in Virginia. But that's just what I think.

'gjarnoldjr'

If you believe in a preferential ideology, you don't own it, it owns you. If that is true, many companies, unions, politicians and owners keep their focus on constant positions in a non-constant marketplace. That creates overriding economic and competitive pressures that may result in lower grocery wages.

If more support is needed for unions and public policies to correct the situation, who are we kidding?

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Gene Hoffman, President/CEO, Corporate Strategies International

I'm rather surprised more people haven't commented on the agenda-driven nature of this "report"...perhaps they're choking on their coffee, or maybe they think it's too obvious to merit comment; but anyway, so much for my opinion of the recommendations.

And I'm not sure I agree with the premise either. Maybe store managers and corporate personnel could "put their kids through college, [and] retire with a comfortable income" but I doubt stocking clerks could. And therein lies the problem: most every position in retail has been reduced to the level of stocking clerk. The public had a choice between bow-tied clerks selling $4 cans of soup or 200K gsf supercenters staffed by 3 high school dropouts...it chose the latter.

'notcom'

In my locale the unions have already cost their members more retail jobs than they've gained by contributing to store and entire chain closings. I rather imagine the situation is similar in California. Yes, this is a pure PR advocacy piece not a serious report.

'Liatt'

Each grocer has a different labor model. It would appear that the sterile chains in California most likely have decided to hire the least skilled employees and have them work part time.

I think the days of having skilled, full-time workers in struggling grocery stores are over. These jobs are no longer designed for people interested in making a living wage. There are plenty of grocers that pay a "living" wage, however they usually require that workers be young, fit, and quick on their feet.

Labor unions promoted a work environment that benefited older, slower, expensive workers and did nothing to financially benefit the supermarket itself. Supermarkets had to take matters into their own hands in order to survive which meant changing the parameters of their labor model to something more affordable.

Hy Louis, Tea buyer, Wong Imports

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