This summer, Shaw’s announced that the supermarket chain would be closing all of its New Hampshire locations. A week later, Stop & Shop, another supermarket chain announced that it would be closing its New Hampshire locations as well. The reason given by both chains was that their stores were under performing terribly.
No one had any doubt as to why both chains were suddenly losing money after years of being in the state. Market Basket, another supermarket chain expanded this year into Manchester, the largest city in New Hampshire. Stop & Shop and Shaw’s simply could not compete with Market Basket’s lower prices. Hannaford, another supermarket chain with two stores in Manchester, also boasts lower prices than Stop & Shop and Shaw’s.
Why are these two departing supermarkets unable to beat their rivals’ lower prices for essentially the same products? Because they are both unionized workplaces. Iron-clad labor contracts negotiated by unions often demand the employer pay for wage increases and a variety of benefits such as pension plans. Imagine how expensive breaking out of the labor contracts must have been that it was actually cheaper and easier for these two companies to shut down all of their New Hampshire locations.
My own experience as a worker at a unionized supermarket in New York City gave me some personal insight into how low-wage workers fare under union “representation”. When I was hired by Pathmark Supermarkets, I had to join the United Food and Commercial Workers Union as a requirement of keeping my job. The minimum wage at the time was $6 an hour (2000), and that’s what I was paid during my initial probationary period.
Once my union membership was established and the probation was over, salary was bumped up an extra 25 cents an hour. This did little to help me, as I was a full-time college student and a part-time employee, working about 20 to 25 hours a week and having $12 a week withheld from my paycheck for union dues, meaning I was paying $12 a week for the perceived benefit of being paid an extra $5 to $6.25 a week.
When I called in sick after over a year as a Pathmark employee, I was told that no one could be called in to cover my shift, and that I was to either show up to work or be fired. I told them I wouldn’t be coming in and hung up the phone.
When I entered the store a week later to pick up my final paycheck, I spoke to my union representative to see what actions could be taken to get my job back. He replied that nothing could be done, adding, “You should’ve just shown up to work like your supervisor told you to.” So much for unions protecting the workers from management. Since I was terminated before two years of consecutive union membership, I was ineligible for any kind of pension, meaning my dues had gone into someone else’s pension or to the $366,000 annual salary of then-UFCW president Douglas Dority (source: U.S. Dept. of Labor based on Dority’s salary in 2001). Not bad for a guy who makes a living off of the weekly dues of low-wage workers!
Labor unions served a purpose in American history, but today do little to help its lowest earning members. The unions’ irrelevance in today’s workplace becomes even more apparent as only six percent of private sector workers were union members in 2012. With federal, state and local tax burdens increasing, the private sector refuses to renew labor contracts or interact with labor unions in any way. New Hampshire residents have seen what is happening to businesses that are still entangled in the union mess. No wonder many public sector employees are union members since “management” doesn’t worry about running in the red and can simply steal more money to pay for things like pensions and other perks that are non-existent in the 21st Century private sector.
Today’s unions cozy up to big government, and as in the case of my former employer, cozy up to management. In fact, it appears that unions pander to everyone except the people who pay into them.
So the next you’re shopping at a non-union business, know that the employees have one fewer party meddling between their relationship with their employer, and one fewer hand snatching money from their paychecks and giving nothing in return.