47,000 grocery workers in California avert a strike with new contracts

New York(CNN Business) Around 47,000 union workers at Albertsons, Ralphs and other grocery chains in southern California reached an agreement with the companies Thursday on new contracts that they say improve wages and benefits.

After six months of talks, the deal avoids what would have been the largest private-sector strike since 74,000 General Motors employees walked off the job in 2007 and the second major work stoppage in the supermarket industry this year. In April, 31,000 Stop & Shop workers at 240 stores in New England walked out of their jobs for 10 days. That campaign drew support from Democratic presidential candidates Elizabeth Warren, Joe Biden and Bernie Sanders.

The union representing California cashiers, stockers and clerks at more than 500 stores declared victory on Thursday.

"This contract not only rewards hard work, it provides affordable healthcare, strong pensions, and critical benefits that ensure our UFCW members are able to build the better life they've earned," said Marc Perrone, president of the United Food and Commercial Workers International Union.

Despite the Stop & Shop strike earlier this year, work stoppages are rare in the grocery industry. Grocery workers often have more leverage in negotiations with employers than other retail workers because groceries are perishable and companies can ill-afford slowdowns, experts say.

The new Ralphs and Albertson contracts met a list of union demands. They include wage increases between $1.55 and $1.65 an hour for workers over the course of the three-year contract, the union said. They also include provisions for pension funds, provide additional guaranteed hours for veteran workers and expand health care access to workers' family members.

California workers voiced concerns about automation in their stores. The agreement stipulates the creation of a joint "future of work" committee to "ensure worker voices are part of the evolution of grocery jobs," the union said.

"We are pleased that we reached an agreement that provides for significant wage increases, maintains affordable health care, and continued investments in our employees' pension fund for their retirement," a spokesperson for Albertsons said. A spokesperson for Kroger (KR), the owner of Ralphs, did not immediately respond to requests for comment.

Supermarkets are one of the few union strongholds in the retail and service industries.

Only 4.5% of America's retail workers belonged to a union in 2018, according to the Department of Labor. The rate is below the 6.4% union membership rate for private-sector workers.

Walmart (WMT) has more than 1.5 million US employees and Target (TGT) has 360,000 workers. None of them are unionized. Walmart, born in Arkansas during the 1960s, fought hard to prevent unions from organizing workers as it swept across America.

But the majority of Kroger's approximately 453,000 employees belong to unions, while 63% of Albertsons 267,000 workers are union members, according to filings.

Supermarket workers, especially butchers, organized in the early and mid-20th century before the rise of big-box stores, according to labor experts.