Tag: Steve Burd
Health Care Savings the Old-Fashioned Way
by Josh K-sky on Dec.02, 2009, under Politics
In 2005, Safeway was forking over $1 billion a year to provide health insurance for its workers, and the cost was rising 10 percent a year. It was Mr. Burd’s moment of truth: he realized he could no longer stand by as health care costs ballooned.“We were saying ‘Wow, we’re paying almost twice in health care costs as what we’re making in earnings, and in five years it’s going to be another half a billion dollars,’ ” he recalls.
Health Care Savings Could Start in the Cafeteria, New York Times, 11/28/2009
Was that Steve Burd’s moment of truth? Or did the Safeway CEO’s moment of truth come in 2004, when after a 141-day strike he bludgeoned his workers into accepting a two-tiered contract that would revoke most health benefits for new employees (not to mention leave them with much lower pay)?
Or did the moment of truth come later on, in 2007, when the union representing Safeway workers won back what they’d given up in the previous contract?
The Los Angeles Times suggested back then that the UFCW may have whispered the truth in Burd’s ear:
The new agreement, approved by 87% of workers over the weekend, looks like an unqualified victory for the UFCW, which has reorganized to better negotiate with the large supermarket companies. The UFCW sought wage increases, a single pay scale for all employees and shorter waits for health insurance for new employees and their families — and got practically all of it. Albertsons, Ralphs and Vons rolled back the two-tier wage system. They also acknowledged their crucial role as providers of healthcare for their workers.
For its part, the union agreed that workers also bear some burden for their healthcare expenses. The grocery chains’ new plan will emphasize preventive care, establish healthcare savings accounts for employees and require workers to pay premiums for coverage. The goal is to make employees more sensitive to how they spend their healthcare dollars, in theory leading to less waste.
It’s not entirely surprising to see this industry display a bit of forward thinking. Safeway chief executive Steve Burd has been pondering healthcare since the lockouts of 2004, and has joined forces with Big Labor to call for universal coverage.
Burd would have been happy to save on health care by no longer paying for it. It’s a testament to the resilience of the UFCW that Safeway is pushing towards innovation.