Mega-merger will push grocery workers over the unemployment cliff

Unemployment cliff, image by Marus Nazzarov

OPINION – The “hot labor summer” gripping Southern California shows no signs of cooling down. Hollywood actors have joined forces with TV and movie writers in walking off the job. Striking hospitality workers made headlines calling on Taylor Swift to postpone her tour. These stories are a stark reminder that corporate profits almost always come at the expense of workers’ livelihood.

It’s a price grocery workers across California could soon be forced to pay, if state lawmakers don’t take action to protect them.

The threat to workers – and consumers – comes in the form of a giant merger: Kroger, the largest grocery chain in the country, could soon acquire Albertsons, the second largest grocery chain, if their $25 billion proposal survives Federal Trade Commission (FTC) scrutiny.

In the checkout aisle, consumers can expect to see higher prices on goods at a time when many Californians are relying on food banks to put meals on the table.

History offers us a peek into the future awaiting grocery workers if the merger goes through.

Take Christina for example, who was laid off in 2015 during the last major grocery story merger. She scrambled for months, applying for new jobs while working as a seamstress and a house cleaner just to make ends meet.

Grace was also laid off in 2015, due to the same merger. She and her children had no choice but to rely on the generosity of family and friends to stay afloat.

Christina and Grace each found new jobs, but only after months of fear that being able to pay the rent and put food on the table would be impossible.

That kind of existential anxiety never quite reaches the shareholders and the company’s top brass. Albertsons executives could receive a total of $146 million in “severance” if they resign following the deal. Shareholders have already received $4 billion in dividend payouts.

Meanwhile, the essential workers who power California’s global economy and helped generate “eye popping” profits for grocery companies during the pandemic won’t see a dime in severance pay or dividends if the merger triggers mass layoffs. Many of these workers already live paycheck to paycheck; and with no safety net, thousands will face significant financial hardship.

State lawmakers should follow the example set by states like New Jersey and Maine, where employers are required to pay severance to workers who are laid off en masse as the result of a triggering event, like a merger.

It’s a dark future for thousands of workers at Ralphs, Food 4 Less, Albertsons, Safeway, Vons and Pavilions, but one that California could easily avoid.

State lawmakers should follow the example set by states like New Jersey and Maine, where employers are required to pay severance to workers who are laid off en masse as the result of a triggering event, like a merger.

Implementing a similar policy in California would create a social safety net paid for by companies who can afford to cover the cost, without reaching into taxpayers’ pockets. With extra money in the bank, laid-off workers would have extra time to find another job.

The legislature must move quickly though, to pass this bill before the end of the Capitol’s session in just a few short weeks.

In Los Angeles and Orange Counties, 115 of 159 Albertsons stores are within two miles of a Kroger store and are potential targets of closures by the FTC. This could result in an estimated 5,750 workers losing their jobs in the Los Angeles region alone.

State Sen. Lola Smallwood-Cuevas has already taken the lead in California with Senate Bill 725, the Grocery Worker Safety Net, which would require companies like Kroger to provide its workers with one-week severance pay for every year of service if they are laid off due to a merger, a fraction of what Kroger and Albertsons’ executives are in line to receive if the merger goes through.

SB 725 has already been approved by the State Senate, and by the state Assembly’s Labor and Employment Committee. To ensure workers aren’t paying for company profits with their livelihoods, the rest of the Assembly and Governor Newsom must follow suit.

Mark Ramos is the president of the United Food and Commercial Workers (UFCW) Western States Council and UFCW Local 1428 in Claremont, California

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