By Ken Jacobs, Arindrajit Dube and Felix Su
UC Berkeley Center for Labor Research and Education
January 2007
In March 2004, after a four-and-a-half month strike and lockout, the United Food and Commercial Workers (UFCW) and three major grocery chains signed a contract that significantly restructured health insurance coverage for grocery workers in Southern California.
Among other provisions, the new contract in Southern California:
* Increased waiting periods from four months to twelve months for individual coverage (18 months for clerks) and 30 months for family coverage.
* Increased co-pays, co-insurance and deductibles under the new plan, while restricting plan options.
In addition to the changes in health benefits, wages rates for new hires were reduced.
Our central findings were as follows:
* In September 2003, prior to the strike, 94 percent of the union grocery workers in Southern California had health coverage through their employer; by September 2006 that number had fallen to 54 percent. Coverage for workers hired under the new contract was a mere 7 percent.
* As of September 2006, 66 percent of all workers and 29 percent of the workers hired under the new contract were eligible for health benefits in Southern California. The low eligibility rate is a result of longer waiting periods combined with increased worker turnover.
* Prior to the strike, the annual turnover rate for grocery workers in Los Angeles was 19 percent; after the new contract went into effect, annual turnover rose to 32 percent. Turnover of grocery workers in their first year of employment rose from 30 percent to 52 percent.
* Our survey of union members found important impacts on health care utilization due to the reduction in coverage. Of workers with a chronic health condition hired under the new contract, 20 percent fewer of were receiving treatment as compared to their co-workers who were eligible for the higher tier plan. This controls for differences in age, gender and health status between the two groups of workers. All things equal, 20 percent more of the workers hired under the new contract reported to have delayed care when they needed it compared to their coworkers.
Conclusion:
Unionized groceries in Southern California have long been a source of family supporting jobs with full family benefits. The changes in grocery health plans and reduction in starting wages in April 2004 has dramatically reduced health coverage in the grocery industry in the Southern half of the state. Jobs that once provided full time work and full family benefits are now much more likely to be part-time and un-benefited.
The member survey confirms what we would expect from the literature about health care utilization. Workers without health insurance are more likely to delay needed care and less likely to receive treatment for chronic health conditions. Treatment delays may have long term adverse effects on both health and health costs.
http://laborcenter.berkeley.edu/healthcare/grocery_industry07.pdf
Comment:
By Don McCanne, MD
In this age of two-worker households, employment as a grocery worker provided a very important benefit. Not only was the job a good second income source, it also provided the family with generous, union-negotiated, employer-sponsored health benefits coverage. This allowed the spouse greater options in employment, including self-employment, as quality and availability of employer-sponsored coverage continued to decline.
Faced with ever-rising health care costs, the grocery industry decided that it would no longer be the source of this important benefit for many Southern California families. Most of you remember the very painful strike and lockout of three years ago that ended in an agreement which achieved this goal of the grocery industry.
This study confirms the fully predictable results of that settlement. Family breadwinners are being replaced with an unstable part-time workforce with high turnover and no benefits. Employment as a grocery worker is no longer suitable for an individual looking for family health coverage. Also, the lack of coverage for this part-time workforce has predictably impaired health care access.
This study is presented not so much to decry the Walmartization of the grocery industry (though certainly an important issue), but more to point out that private group plans and private individual coverage are no longer effective in ensuring affordability and access of adequate coverage. It has taken only three years for coverage to fall from 94 percent to 54 percent of grocery workers.
Reasonably comprehensive coverage must be 100 percent automatic for everyone. Regardless of employer mandates, individual mandates, tax credits, or whatever, private group and individual plans will never get us there. We truly do need a single payer program of national health insurance.