Labor’s Win: Why the Stop and Shop Strike Matters

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With it being two weeks since the end of the Stop and Shop strike, it is easy to let it fade into distant memory. The shelves are stocked again, the workers are enthusiastic, and you no longer have to make the drive to the Shaw’s half-a-mile down the road.

This is not an event that should forgotten though. With the victory going to the workers and the United Food and Commercial Workers (UFCW) union in a relatively quick 11 days, this strike was an important bright spot for American labor.

Details First

For those of you who did not follow the strike or are not from an area that was affected, here’s some backstory.

Back on April 11th, 31,000 Stop and Shop workers walked off the job in protest to potential cuts to healthcare benefits and pay, crippling hundreds of stores. After 11 days of picketing, a tentative agreement between the company and the UFCW representatives was reached, sending people back to work. This was not without damage though, with Ahold Delhaize, Stop and Shops’ parent company, losing an estimated $90-110 million.

By May 1st, the new labor contract was ratified by all of the union members, cementing the victory. The new contract contains the following, according to Stop & Shop president Mark McGowan and the UFCW: 1) higher wages for full- and part-time associates, including continued Sunday premium pay; 2) access to affordable and quality health care that maintains eligibility for spouses; 3) no reduction in sick time, personal days or paid holidays for any current or future employee; and 4) increased pension contributions from the company.

Why It Matters

So why is this important? To start with, labor unions are a dwindling influence in the United States. Union membership as a percentage of all workers is on a continuous decline and is hitting new lows every year. Back in 1990, 19.1% of all workers were in a union. At the beginning of 2019, that number stood at 11.1%.

For private sector workers specifically, like those at Stop and Shop, the union membership rate is even worse, being at 6.4% for 2018. For multi-billion dollar multinational companies like Ahold Delhaize, unionized workers are rare. Stop and Shop is the only grocery store chain in New England with a union. Falling membership as a whole weakens workers sway over decisions, to the point that many consider smaller and fewer unions to be a large contributor to the slower wage growth of the past few decades.

Adding to this overall decline of union influence is the sheer size of Ahold Delhaize, whose U.S. net sales were $44.17 billion for 2018. A company with this much market share has the scale to hold out on employees and still pay a dividend out to investors at the quarter end. Altogether, this was not a scenario where it seemed likely for a union to grab a victory.

The workers none the less won the dispute though, bringing in a rare labor win against a multi-billion dollar private company.

There are a couple of key points that the union had from the start that allowed them to gain the upper hand. First and most importantly, there was the public support, with the vast majority of regular customers not crossing the picket lines and avoiding stores. This was a result of the strike being portrayed as a protest against corporate greed, with the union president citing potential healthcare and pay cuts even with Ahold Delhaize’s nearly $2 billion profit for 2018. By focusing on equity and not simply wanting more pay, the UFCW successfully got the public’s sympathy.

Along with this, there is the competitive nature of the grocery business. Most customers in the effected areas of Massachusetts, Connecticut, and Rhode Island live in dense cities and towns that contain numerous grocery stores. For example, customers of the Mansfield, MA, Stop and Shop had a Shaw’s and a Roche Bros. to choose from within a five minute drive. Coupling these convenient other shopping options with the strong public support, the strike was successful in starving stores of sales, giving the company very little room to hold out.

Without these keys, the strike very well could have ended up like the recent National Grid lockout that left over 1,200 employee out of work for six months. These National Grid workers ended up getting pay increases and improved benefits, but not after losing half-a-year’s worth of pay. By successfully getting the public on their side and killing store sales, the UFCW was able to get a deal while minimizing their members’ lost income.

Hope For Private Sector Unions

By getting what they wanted after only 11 days, the Stop and Shop workers displayed how unions in the private sector, although increasingly rare, can still successfully protect workers’ interests. If unions around the country want to maintain influence going forward, they should take note on the importance of public opinion. Had UFCW not won the public relations battle, store sales may not have been hit as hard and Ahold Delhaize may have been able to hold out on a deal.

Labor may not be on a full swing bounce back, but a bright success at Stop and Shop can give unions some hope for a future.

 

 

 

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