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In the wake of an overwhelming ratification of a new four-year labor contract that covers some 65,000 employees working for Albertsons, Ralphs and Vons in Southern California, details of the pact are beginning to become clear – with the chief concession made by the chains being the elimination of a two-tier salary structure.

The Los Angeles Times writes, “The new agreement reverses a system established after a 141-day strike and lockout almost four years ago that paid new workers lower wages and benefits than veteran employees at the big supermarket chains in the region,” and is tantamount to an admission that it doesn’t work. “Almost from the day the last contract kicked in, the two-tier system irritated workers and frustrated mid-level managers in the stores … New employees resent getting paid less for doing the same tasks as the veterans, he said, and veteran workers get irritated at the constant turnover in the ranks of the new employees and the stress of working with untrained workers.” According to one study, turnover among lower-tier workers almost doubled under the old two-tier system.

According to the Wall Street Journal, “The contract also shortens the waiting period for health insurance coverage for new hires and their children to six months, from as long as 30 months. However, new workers must wait more than five years to become eligible for the top-tier health-care benefit package.

The LA Times writes that the chains “were able to offer wage increases and improve health benefits because the union agreed to significant initiatives that will help the companies control expenses.

“For example, the former second-tier workers and all new employees will pay weekly health insurance premiums of $7 to $15, based on their dependents, even when they graduate after 5 1/2 years of service to the top health insurance program. Workers hired before the strike will continue to get the insurance without making premium payments.

“Additionally, the new contract provides no-cost or reduced-cost weight management, smoking cessation and other health programs … The agreement pays 100% of the coverage for preventive care such as physicals, mammograms and well-child care and reduces prescription payments for maintenance drugs for chronic conditions such as diabetes and asthma.”
KC's View:
Better health care coverage should go hand in hand with greater personal responsibility. That’s what Safeway’s Steve Burd has been saying all along, and it sounds like they may have made some significant strides in this direction.