Millen, Bruce H.

English

Research Papers in Economics

CURRENT LABOR RELATIONS ISSUES IN THE FOOD INDUSTRY
by
Bruce H. Millen
Office of Policy, Evaluation and Research
U. S. Department of Labor
Background
Food production, processing and
distribution have undergone revolutionary
changes in the past 40 years. Not the
least of these has been the labor rela-
tions field. While not universal, union-
ism is common place and tends to set the
pattern for personnel practices along
the links which make up the food chain.
Only farm labor lags behind, but
even here we have seen the inclusion of
farm labor under the minimum wage law,
under state Workers Compensation acts in
some 30 states, amd most recently in-
clusion under the unemployment insurance
system. This coverage is subject to
limitationsbut the principle is accepted.
Extension of collective bargaining
rights to hired farm labor now seems to
be but a matter of time.
When we talk about the food indus-
try - a term which tends to be mis-
leading - we are encapsulating a diverse
number of organizations divided function-
ally into crop production, food process-
ing, transportation,warehousing and
finally, retailing.
In this last category alone, we are
talking about almost 200,000 individual
stores with total sales of over $130
billion a year. There are over 31,000
stores classified as supermarkets, of
which 20,000 are tied to chain opera-
tions.
This fragmentation carries through
on the trade union side. There are three
major unions in retailing: about 10
percent of the membership of the 2.2
million Teamsters is in the retail food
area, the Retail Clerks Association has
450,000 members in retail foods, and
the Amalgamated Meat Cutters has 190,000
retail food members. In some stores
the Retail Clerks represent the grocery
department and meat department; in other
stores the Meat Cutters have wall-to-wall
representation. In 1976, some 1372
contracts covering
f
42,000 workers came
up for negotiation.
Figures in the food processing sector
are not available, although we do know
that meat processing plants are widely
organized and the Meat Cutters Union has
some 360,000 of its total membership in
the packing industry. The Teamsters
have many contracts in perishable fruits
and vegetables on the West Coast.
Organizational activities in crop
production is a story in and by itself
which in recent years has resulted in
market disruption in selected areas. The
efforts of the United Farm Workers extend
beyond the pure collective bargaining
drive, characteristic of most unions,
into the socio-political realm.
The inevitable product of the type
of fragmentation on the management and
the union side which I have described
above is internal union competition, leap-
frogging and whiplashing.
Journal of Food Distribution Research February 77/page 73The history of intense competition
in the food sector has made it difficult
to win agreement for broader coopera-
tion with labor from the management
side; the respective’unionsare wary
of each other and remain fearful of
ultimate management objectives if they
give ground on long-cherishedrights.
And yet, both labor and management
feel vulnerable to the challenge of
forces outside the industry, not the
least of which is wage and price con-
trols.
The Road Ahead
One change I can foresee in govern-
ment policy which will have an impact
on the food sector,concerns agricultural
labor relations. You are familiar with
the problems encountered in the last
decade, so I need not go into detail.
Former Secretary of Labor Shultz testi-
fied before Congress in 1969 in favor
of some form of labor legislation favor-
ing an agricultural’laborbill. But,
the lack of concensus within the com-
munity of growers, and as well as within
the labor movement, thwarted efforts by
individual Congressmen or by the Execu-
tive to promote acceptable legislation.
It is quite likely that recent develop-
ments will now force the issue.
I might add at this point that I
have worked on the issue of agricultural
labor relations off and on for the past
few years. I feel the resolution of the
problem has been too long delayed and
that collective bargaining should be
permitted. My viewpoint is not tied,
however, to support for one adversary
as opposed to another. There are neither
“good guys” or villains in my scenario.
Rather, I look at the amorphous,
ill-defined labor market in agricultural
production. I suspect that the nature
of the labor market with its dependence
on casual and migratory labor and the
methods by which this labor is recruited
and utilized is inefficient. In addi-
tion, I also suspect that many of the
costs associated with this poorly organ-
ized labor mechanism are transferred to
the society at large instead of being
internalized.
An insight to the point I am making
is contained in the following quotation:
“The mechanized tomato harvest has
produced a shift in California from an
unsophisticated production system,
accompanied by primitive employment
relationships, to a sophisticated and
complex production system with continu- 2 ing primitive employment relationships.”
The “primitive employment relation-
ships” noted above are in large measure
traceable to the primitive or poorly
developed labor market structure. His-
torically, this has been an area in
which unionism has had a positive impact
because it contributes to structure and
stability. Unions have introduced a
degree of rationality into seasonal and
casual labor markets.
Moving on, I can only assume, given
political developments, that the trade
unions will try to push through some
amendments to the National Labor Rela-
tions Act, notably revocation of Sec-
tion 14(b). But such efforts’have
failed in the past, and they may suffer
the same fate this time around.
Whatever develops, the basic rules
of the labor relations game will remain
unchanged. We have had 40 years exper-
ience with the system. It has served
us well, and neither of the parties of
direct interest nor public policyframers
seek major change.
I think I should remind you that the
National Labor Relations Act is predicated
on the creation and maintenance of “sub-
stantially equal bargaining power” in
the words of the late Senator Taft. One
February 77/page 74 Journal of Food Distribution Researchmight ask quite legitimatelyif the
abstract ideal squares with reality in
any given industry, but for the present
such questions are not being pursued.
What is important here is the
recognition of competing power centers
as underlying the relationship between
management and labor. Thus, while
strikes over recognition - the most dis-
orderly and potentially threatening to
law and order - were to be reduced, no
one then, or now, has ever felt that
strikes over contract issues should be
restricted under normal circumstances.
Therefore, the use of crude economic
power is not and should not be fore-
closed in our assessment of the future.
There is another level at which
power factors operate, and that is at
the socio-political level. These factors
form the climate within which labor
management relations take place and in-
fluence the extent of organization in a
given geographic area or a particular
industry. These climate factors often
determine the size of wage determinations
and other contract characteristics as
well.
U. S. trade unions have fought for
union security clauses (closed shop, union
shop, etc.) in order to compensate for a
lack of social and political power in
many parts of the country. Union security
clauses are virtually unknown in other
industrializedcountries because the
climate for union activity is more benign.
As a result, the labor-managementclimate
in the countries of Western and Northern
Europe is free of much of the harsh ad-
versary characteristics found in the
United States, and joint problem solving
between management and labor is much more
common.
Work of Joint Labor-Management
Committee in Retail Food
There is, however, an important
joint effort now taking place in the
U.S. food industry which bears watching.
I refer to the work of the Joint Labor-
Management Committee of the Retail Food
Industry. The Committee is almost three
years old and is establishing an impres-
sive record. Its accomplishments are not
those which make for headlines; indeed
the Committee could not remain in exis-
tence if such were the case.
The Joint Comnittee is composed of
the top officials of the three major
unions, along with 11 representatives of
the major food chains - all but one of
whom is the Chief Executive Officer of
the company. ‘his group forms the
Executive Comnittee. It is supported
financially by the parties and by two
trade associations - the National Assoc-
iation of Food Chains and the Super
Market Institute.
It is chaired by an experienced
third-party neutral. He has no stated
powers - no clout other than that of moral
suasion as concensus develops on any given
issue.
One can imagine the problems faced
by a neutral chairman in overcoming the
suspicions on the part of both manage-
ment and labor. Most of those invited
to the first meeting in order to discuss
the possibility of the formation of such
a committee, for example, had never met
each other. After the original meeting,
a group of deputies meeting weekly took
three months to put together an accept-
able working document around which the
Joint Committee could form.
Journal of Food Distribution Research February 77/page 75The work of the Joint Committee can
be understood by the following quote
from the agenda agreed upon almost three
years ago:
If the Committee is to make a
constructive contribution to the
industry, it will have to be
sensitive to interferencewith
normal collective bargaining
and respect the autonomy of the
individual organizations. The
Committee cannot and should not
be a mandatory industry settle-
ment organization.
However, with reliable data
that is kept current, and
utilizing its role in encourag-
ing open communication and
exchange of information on a
national basis, the Com-
mittee may be able to assist
the industry in key contract
discussions that might other-
wise lead to major confronta-
tions.
The original agenda also stated that the
“Committee shall be a national forum for
discussion of longer-range industry
problems that often surface in local
negotiations and which may benefit from
national attention to secure mutually
beneficial results.”
The Committee has taken upon itself
the establishment of an ongoing forum in
order to improve communication between
labor and management at all levels.
Little is to be gained by a meeting of
the heavyweights and public personal-
ities on each side, if the genuine in-
terests and concerns of the entire
structure are not considered. The diver-
sity and fragmentation of that structure
does not lend itself to discussions made
by a core group. Under these circum-
stances, it is clear that no miracles
are in the offing.
What types of problems have come
before the Committee and what hope is
there that its activities will be useful
in solving industry problems?
The Committee has worked on the
relationship between top management and
the international unions and the defini-
tion of the scope and limits of authority
and responsibility on both sides. Tl~i,Q
may sound fuzzy, but I can say, based cm
my own experience over the years as a
person in the middle, that the degree of
mutual ignorance of one another’s problems
is monumental.
The Committee has worked on the
problems of governmental regulation, one
which is common to all those who operate
retail stores and to the unions as well.
A subcommittee has been established to
study the special problems of retailing
in regard to OSHA, equal employment and
the Pension Reform Act (ERISA). These
are examples of national problem areas
which are beyond the capacity of local
organizations to resolve.
The Joint Committee has also inter-
ested itself in the area of technological
change. The neutral chairman, for example,
served as a member of the Public Policy
Subcommittee of the Ad Hoc Industry Com-
mittee on the Universal Product Code.
He could not have undertaken this func-
tion without approval of the labor mem-
bers.
tiis does not mean, however, that the
union representatives have committed
themselves to support any changeover to
the automated checkout system. It does
mean rational consideration has been given
to such a move.
WIIOknows when the benefits of these
tentative, groping discussions of tech-
nological change will pay off? In this
business, haste does indeed make waste.
There is no quick fix in the labor
February 77/page 76 Journal of Food Distribution Researchrelations field, and mutual accommoda-
tion to new developments must, of
necessity, take time.
The Joint Committee has, as one of
its initial objectives, the collection
of industry data about wages and fringe
benefits in order to assist the industry
in reaching constructive decisions in
collective bargaining. The analysis of
this informationhas set the stage for
the offer of assistance to those
directly engaged in bargaining.
The Committee cannot interfere
mindlessly or impose solutions on free
agents. It has, however, worked out
general guidelines to help the parties,
and it will offer assistance about
trends, wage comparisons, pension ben-
efit plans, etc. It targeted some 24
bargaining situations in 1976 which
were key to the industry and where it
was felt some outside help could be
useful. The Committee publicly an-
nounced its concern and its interest and
appointed representatives of both sides
to track developments and to identify
the point at which an offer of assis-
tance might be acceptable to the parties.
The Committee does not serve as a
mediator, although it does cooperate
with the Federal Mediation and Con-
ciliation Service. It does not nor-
mally have a representative at the
bargaining table.
The best that can be said is that
the Committee representatives serve as
“facilitators” to agreement. It has
been successful in California in facil-
itating an agreement involving 54,000
workers.
It facilitated restructuring bar-
gaining in the Washington-Baltimore
area, and according to one union leader
in private conversation, “has been most
helpful in several situations.”
Comments
I have devoted a great deal of
space in developing the workings of the
Joint Committee for two reasons: First,
I think this effort at joint problem
identificationand discussion is of
tremendous significance to the retail
food industry. It can lead to the
rational resolution of many of the
structural problems plaguing all of you
which has its ultimate impact on the
consumer.
It is all well and good for each of
us to understand in the abstract that
the present labor relations configura-
tion can be made more rational. In
certain cases, union mergers could
contribute to the type of stability which
can produce constructive change. The
establishment of common contract expira-
tion dates in certain areas can be use-
ful, or area and regional bargaining
might help. Technological changes -
centralizing meat cutting or the use of
the automated checkout system - may be
regarded by some as the answer to food
productivity problems.
But no one in this audience would
accept any of the above proposals “cold
turkey,” and none of them can be put
into practice unilaterally.
Problems of this nature have to be
discussed and studied outside of the
“combat zone,” and that is what the
Joint Committee is trying to do.
Secondly, I view this experiment in
developing trust between labor and
management in a broad perspective. There
are other industries where structural
problems are interfering with the smooth
functioning of the labor relations
system. It may well be that ongoing suc-
cess in the retail food sector can
provide insights into methods for problem
solving efforts in other sectors of our
economy.
Journal of Food Distribution Research February 77/page 77Footnotes
1
Industry and union-related statistics 2
Friedland, William H. and Amy Barton,
appear in speech by Wayne Horvitz, Im- “The Harvesting Machine Saved Tomatoes
partial Chairman, Joint Labor Management for California,” Trans-Action Magazine,
Committee of Retail Food Industry, to Sept./Ott. 1976, pp. 35-42.
National Academy of Arbitrators, San
Francisco, April 1976.
February 77/page 78 Journal of Food Distribution Researcl

CURRENT LABOR RELATIONS ISSUES IN THE FOOD INDUSTRY

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