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Latest News - December 2013

December 20, 2013
Unions Talk But don't deliver
Source: Economic Policies for the 21st Century

The United Food and Commercial Workers union is funding campaigns to raise the hourly minimum wage to $15 and unionize fast food workers. But an examination of UFCW contracts with the Kroger Company show that entry-level workers represented by UFCW are paid close to the current minimum wage, never reaching $15 an hour. Even managers with six years of experience do not earn $15 an hour.

The UFCW funds organizations such as the Restaurant Opportunities Centers United and Jobs with Justice.  ROC supports the “Fight for Fifteen” protests, which demand that restaurants pay an hourly minimum wage of $15. Jobs with Justice advocates a “living wage” of at least $12.50 an hour, along with health benefits and full-time positions for those who want them. Jobs with Justice and its affiliates received $212,000 from the UFCW last year.

How much does the UFCW negotiate for its union members? Reasonable people would expect that union members would be paid above minimum wage, especially since they have to pay union dues out of their salaries.

In this case, reasonable people would be mistaken. An examination of UFCW contracts shows that even senior union members are not receiving the wages that ROC and Jobs for Justice demand. 

Consider a department manager at Kroger’s union shop in Michigan. She earns a maximum rate of $13.80, even after over half a decade on the job. If this is the highest wage the UFCW can negotiate for skilled, experienced workers, how can the union provide entry-level, low-skilled workers with $15 an hour? 

It is not possible for them to accomplish this. Yet, receiving media coverage for the protests they sponsor is an effective way to increase membership and dues collections. The wage they demand is more than twice what similarly skilled union members are paid, namely $7.40 an hour for an entry-level cashier.

 Courtesy clerks are paid a starting rate of $7.40 an hour and can work their way to up a wage ceiling of $7.45, after 12 months on the job. Fuel clerks do not fare much better; they start at the same $7.40 and can earn $7.80 an hour after three years of experience, barely over half of the $15 an hour wage worker centers supported by the UFCW demand. Specialty clerks also start at $7.40 an hour, but can earn up to $9.35 after six years. This amount is still 25 percent below the $12.50 an hour “living wage” Jobs for Justice claims all entry level workers should be paid. Read the full union contract between Kroger and the UFCW here.

The take-home pay is even lower once dues—and federal and state taxes—are removed. Dues are mandatory and usually take between $19 and $60 a month from members’ paychecks. 

It is disturbing that the UFCW is promising nonunion workers high wages if they sign up, but the union is not delivering these wages to existing members. It is clear that unions are driven to deceit due to declining membership. They will do practically anything to get new members because they need a steady flow of dues to pay salaries of union officials, to prop up failing union pension plans, and to donate to political campaigns. The aging of the union membership combined with the lack of new members makes the UFCW’s generous defined benefit pension plans unsustainable.

It is expensive to run a union. The average total compensation for those employed by the UFCW—rather than represented by the UFCW—is $88,224 a year. This income is almost six times what the union negotiated for cashiers at Kroger’s. Joseph Hansen, the International President of UFCW, earns in excess of $350,000 a year—over twenty times the earnings of many of the workers he represents. The Executive Vice President and National President both earn over $300,000. Are entry-level union workers receiving benefits from paying dues out of their $7.40 an hour paychecks to fund these salaries?

One benefit that union members lack is a well-funded pension. The UFCW has one of the worst records for funding of union pension plans. The Labor Department has informed the UFCW that nine of its pension plans have reached "critical status," meaning they are less than 65 percent funded. Many of these funds have been underfunded for six years. They have low chances of regaining sustainable financing unless they can convince more new members to join and pay dues without receiving similar benefits.

Some portion of dues goes towards political contributions. The UFCW contributed $11.6 million during the 2012 election cycle, of which nearly 100 percent went to Democrats. Declining membership leads to declining dues and declining political power.  

The UFCW’s contract with the Kroger Company shows that the union has not managed to deliver a “living wage,” or a $15 hourly wage, to existing members—even those with over 5 years of experience. Although the UFCW promises better conditions to nonunionized workers, the record shows that it is unlikely to deliver.



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