Workers at Hunger Mountain Co-op in Montpelier began operating without a contract as of July 1, the beginning of the co-op’s fiscal year. Negotiations broke down Wednesday morning, and the two sides have turned to the Federal Mediation and Conciliation Service for assistance in reaching a deal.
The two sides’ proposals are about $110,000 apart, or nearly $1,000 per unionized employee.
Workers are looking for a 55-cent boost to wages for all union members, and management has offered 15 cents. In addition, union members get a wage increase on the anniversary of their hiring, which is 25 to 30 cents for most employees.
It appears that the two sides do not completely agree on which issues are on the table. In a discussion Thursday on Goddard College Community Radio (WGDR), Co-op General Manager Kari Bradley outlined three areas of disagreement: wages, health insurance benefits and worker pay for time spent working on union issues.
When Bradley mentioned that last issue, Micum MacIntyre, representing UE Local 255, interrupted to say, “That’s actually not up for negotiation.”
The grocery co-op, which includes a deli and café, is open to the public and owned by its members. Its sales have grown solidly in recent years, except when the store was under renovation and expansion three years ago. According to Drew Hudson, writing for the co-op’s council (essentially, a board of directors elected by member-owners), “We’re in a strong financial position with plenty of cash on hand…and a great store that’s just been renovated to be more energy efficient.”
Unlike corporate management in publicly traded companies, co-op management is not obligated primarily to create strong monetary returns for owners. Co-op member-owners help set the priorities for management to follow. Hunger Mountain’s guidance to management describes both a financial bottom line and other goods, like “a community increasingly educated about food and health” and “local ownership and control of a comprehensive, sustainable food economy.”
Up until a rewrite of the mission statement two years ago, the co-op included paying workers a livable wage as part of its mission. While the term “livable wage” is gone from the mission statement, the council’s direction to the general manager requires him to consider state livable wage levels in setting wage and benefits packages.
Bradley says that the co-op has steadily increased the number of its workers who are paid what the state calls “the Vermont Livable Wage,” which is now calculated to be $12.17 per hour. It is defined in statute as “the hourly wage required for a full-time worker to pay for one-half of the basic needs budget for a two-person household with no children and employer-assisted health insurance averaged for both urban and rural areas.”
Five years ago, Bradley said, 50 percent of workers received the livable wage or more. Now, 88 percent of co-op workers receive the Vermont Livable Wage, Bradley says, and everyone who has worked more than a year is compensated at that level, when all health-care benefits are factored in.
Union members argue that the assumptions behind the state’s livable wage calculations don’t hold for most of their members—they are mostly single, for example. The urban-rural average livable wage in Vermont for a single person with no kids is $15.88.
Bradley says the co-op has used what he calls the “non-partisan” livable wage for at least five years.
With the lowest starting wage set at $11 per hour, Bradley says the ratio of the hourly wage of the highest-paid employee (himself) to the lowest-paid employee is “less than 4 to 1.” In addition, the co-op pays for health insurance with a $250 deductible, fully pays for dental and vision coverage for all single full-time employees, and provides four to seven weeks a year of paid time off. A profit-sharing plan adds to wages; last year the bonus came in at nearly a dollar per hour.
Bradley acknowledged that the co-op is financially healthy when it comes to the debt-to-equity ratio. The reason he wants to slow the rate of growth of wage costs, he said, is the uncertain business climate — with energy prices rising, the state budget squeeze and the ongoing recession. (A blurb in the latest co-op newsletter begins, “Yuck! We just received word from our primary distributor that they are increasing prices on about half the items in their warehouse over the summer, mainly due to rising energy costs.”)
At a packed public meeting in Montpelier’s Unitarian Church on Wednesday night, union members repeatedly charged that management’s latest proposal meant that workers who stay two years at the co-op will see their real income decrease. MacIntyre clarified in the radio discussion with Bradley that the calculation is based on wages alone, not considering other benefits.
Management’s most recent proposal leads to about a 3.3 percent nominal wage increase for the average worker, assuming the anniversary increase is 30 cents per hour. The Consumer Price Index for Urban Consumers was up 3.6 percent in May for the previous 12-month period. (On the other hand, looking at calendar-year averages, the 2010 CPI is up 1.6 percent from 2009.)
All employees, both management and unionized employees, share a health insurance plan, and the insurance company has raised rates by 9.7 percent. The total increase is $130,000, or around $1,000 per employee. Management has offered to cover $75,000 of the increase, and the union has offered to cover $25,000 of it; that leaves the two sides $30,000 apart.
The union, however, says that management is misrepresenting the cost of insurance, as actual claims have been running considerably below projected claims.
In radio appearances and in the Wednesday night meeting, union employees repeatedly referred to the change in tone from bargaining in previous years. MacIntyre charged that management’s negotiating team “literally laughed” at a union proposal in one bargaining session; Bradley categorically denied it.
Many union members referred to arbitration that management and the union entered into over the firing of a long-time employee last year. While management and council members have cited personnel confidentiality and declined to comment on any details of the case, union members have said the dispute involves an alleged theft of $5. After viewing video of the incident together, union and management members had differing interpretations of what happened, so the two parties entered into arbitration.
After reviewing the case, the arbitrator ordered the co-op to reinstate the employee. Bradley estimates that the cost to the co-op and the union totaled $40,000.
The tone at Wednesday night’s meeting was not exactly friendly towards management. A number of member-owners and shoppers at the co-op expressed concern about the way the co-op is being run. One complained that a manager had told her, “I’m running a business.”
She replied, “I thought this was supposed to be a community.”
Another said she had been assistant manager at a co-op in California and was excited when she moved to Vermont and started volunteering at Hunger Mountain. Soon, however, she found that council members didn’t listen to input from members on the new mission statement. She also complained she wasn’t saving money as a member-owner.
Rachel Grossman, who served on the co-op’s council, said she supports unions, but “Part of me feels like we’re in Washington listening to the Democrats and Republicans fight about the debt ceiling. I’m over 50; I’m naïve enough to still believe in the power of words, the power of people to sit down together and come to consensus… It troubles me deeply to hear council members and managers portrayed as the evil ones.”
At least three member-owners at Wednesday’s meeting offered to give up part or all of their patronage refunds to help the workers.
Bradley said the management team offered to work with the union to craft questions for the next survey about members’ willingness to reduce their refunds for the purpose of boosting wages and benefits. He said the union had not been interested in the offer, preferring to reach out to members themselves.
Disclosure: Carl Etnier is a member-owner of Hunger Mountain Co-op and is midway through a temporary, six-month stint as a two-hour-per-week “core worker.” Core workers are member-owners who do not belong to the union, and their compensation is not addressed in the contract that the union and management are bargaining over. You can find him cheerfully bagging groceries at the co-op 4-6 pm on most Wednesdays until October.
