Features

SAN FRANCISCO – The $36,500 that John Reese earns annually checking and stocking groceries at an Albertson’s supermarket in San Jose makes him one of the best-paid retail clerks in the country. 

But Reese and thousands of other Northern California grocery store workers making similar money also live in one of the nation’s most expensive housing markets. 

“It’s so bad that some of my co-workers have used food stamps when they come through the checkout line,” said Reese, 35, who has worked at Albertson’s the past five years. “We don’t want to be greedy. We just want a chance to live the American dream.” 

Boise, Idaho-based Albertson’s Inc. and Pleasanton-based Safeway Inc. run Northern California’s two largest grocery chains. The companies say they can’t afford to pay store workers much more because they have to remain competitive with discount chains such as Costco, Wal-Mart and Target that are expanding their grocery businesses. 

The conflicting financial pressures facing the supermarket chains and their store employees could culminate in a strike as early as Monday. That’s when the labor unions representing 27,000 employees working in 294 Safeway and Albertson’s stores will announce the results of a vote on the “last, best” contract proposal from the grocers. 

The chains say they pay their San Francisco Bay area store workers an average of $15.50 per hour. That is 52 percent more than the average wage of $10.18 per hour paid to retail clerks in the region, according to 1999 estimates by the U.S. Bureau of Labor Statistics. 

“We have to take into account what our competitors pay,” said Safeway spokeswoman Debra Lambert. “We don’t want to expand that gap any more.” 

The companies are offering most workers a $1.50 per hour increase over three years. That translates into a 10 percent raise, based on the average wage of $15.50 per hour. The lowest-paid workers now start at $7.75 per hour while the top-paid workers, including Reese, receive $17.58 per hour. 

Seeking a raise of $2.40 per hour over three years, labor leaders recommend that workers reject the proposal. Management, meanwhile, is conducting interviews with potential replacement workers to ensure the stores will remain open if there is a strike. 

In complaints filed with the National Labor Relations Board and federal court, labor leaders and supermarket management have accused each other of unfair tactics during the voting process. 

A strike would be the first by Northern California grocery store workers since a nine-day walkout in 1995. A year ago, a 47-day strike at a Safeway’s Northern California grocery distribution center cost the company about $66 million in profits. 

The San Francisco Bay area’s astronomical housing prices are the main sticking point in the current dispute. Despite a deep slump in the technology industry, the area’s cost of living preoccupies almost everyone who didn’t cash in on the dot-com boom of the late 1990s. 

“The cost of living and doing business in the Bay Area is becoming a real competitive disadvantage,” said Tapan Munroe, chief economist for Applied Development Economics in Berkeley. 

Since the Northern California workers signed their last contract in 1997, the cost of a mid-priced home in the Bay Area has increased 66 percent to $476,000, according to the California Association of Realtors. During the same period, the average rent for a one-bedroom apartment climbed 53 percent to $1,449 per month, according to RealFacts, a Novato research firm. 

In a report released this month, the National Low Income Housing Coalition estimated that a full-time worker needs to make $33.60 per hour — nearly $70,000 annually — to afford the rent on a two-bedroom apartment in the San Francisco metropolitan area. The supermarket chains say their offers already factor in Northern California’s housing costs. That’s why Safeway’s Northern California workers make about 5 percent more than their Southern California counterparts and as much as 50 percent more than the workers at some of the chain’s other stores, Lambert said. Safeway operates 1,759 stores in 20 states and the District of Columbia. 

Earlier this year, store workers in Sacramento accepted a nearly identical offer now on the table in the San Francisco Bay area. A one-bedroom apartment in Sacramento — roughly 90 miles from San Francisco — rents for an average of $707 per month, a 34 percent increase from 1997, according to RealFacts. 

Labor leaders argue that the supermarket chains are making more than enough money to help San Francisco Bay area workers defray the region’s high costs. 

Through the first nine months of its current fiscal year, Safeway made $900 million, a 14 percent increase from the same time last year. Excluding one-time charges and expenses related to its $9.1 billion takeover of American Stores in 1999, Albertson’s posted a $370 million profit during the first half of its fiscal year ended Aug. 2 — a 15 percent decrease from last year.