Visit uncharted.ca!
  • authored by Members for Democracy
  • published Sat, Nov 27, 2004

Real Canadian Superstores: The UFCW's Low Wage Wasteland

Part 1: Wages of Hypocrisy

Imagine working in a job where you:

  • Can earn minimum wage for up to two years.
  • Can be assigned to your Department Manager's job without an increase in pay.
  • Must make yourself available for work on certain days of the week with no guarantee that you'll be scheduled.
  • Must work a minimum of 3 years to qualify for benefits.
  • Lose your benefits if you get sick.

It's time to air the ugly truth about the deplorable deal that the hugely spineless UFCW gave the hugely profitable Loblaw Companies for its Real Canadian Superstores in Ontario in the summer of 2003.

The deplorable sellout was necessary, UFCW leaders said, to allow Loblaw's to compete with Wal-Mart which, UFCW leaders believed was about to invade the Canadian retail market with its mammoth Supercenter Stores (stores that sell food and department store merchandise).

The invasion never happened and that really shouldn't surprise anyone. Wal-Mart officials themselves stated publicly that they had no intention of opening any Supercenters in Canada. Industry analysts said that it made no business sense for them to do so. In 2003, Wal-Mart announced plans to build a number of Sam's Club stores in Canada but those were warehouse type stores that would whose direct competitor in the Canadian retail market would be Costco - not Loblaws or any other grocery chain.

But that didn't stop the UFCW from rolling over. Loblaw's officials told them they believed that Wal-Mart Supercenters (WMSC's) were coming to Canada and they planned to create their own low wage wasteland so they could go head-to-head with the Evil Empire. The corporate boys' word was good enough for the UFCW (hey, who can ya trust if not a bunch of management guys looking to make another few billion in profits?)

And so the UFCW agreed to give the Loblaw's boys a gutted version of its existing collective agreements at the new RCSS's which would over a period of time replace most if not all of its conventional supermarkets.

The gutted contract contains such provisions for wages and benefits for part time employees (who, considering that between 80% and 90% of retail food industry workers are part-time will ultimately make up the vast majority of the RCSS workforce) that are so deplorable that it made our heads spin just looking at them.

If Wal-Mart Supercenters were actually coming to Canada, the deplorable RCSS deal would give Loblaws a wonderful competitive advantage. Since the Supercenters are nowhere in sight, the deplorable RCSS deal gives Loblaws an enormous competitive advantage over other Canadian food retailers. It allows Loblaws to set itself up as the Evil Empire - North Chapter. With it's new RCSS's Loblaws can now do unto others what Wal-Mart has been doing in the US, including all the stuff that has been the focus of heated criticism by unions like the UFCW - like exploiting the crap out of the working poor.

How Low Did They Go?

Just how bad is the RCSS deal? Earlier this month, we brought you the shocking news that workers in the lowest paying jobs in RCSS's in Ontario will actually be earning less than their counterparts at Toronto area Wal-Mart stores.

This information was based on a Wal-Mart wage schedule from 2002 - the year that Loblaw officials first met with their UFCW bedmates to chat about gutting the existing collective agreements for the new recruits at the RCSS's. Call us cynical, but it's quite probably that the labour-management buddies knew fully well what Wal-Mart was paying at the time and decided to undercut those rates by dollars per hour in the jobs that are most likely to employ the largest numbers of workers.

Mainstream labour cheerleaders don't want us to talk about this disturbing aspect of the RCSS deal so here's a more in-depth look at what the UFCW - the union that wants to organize Wal-Mart workers, bargained for its most vulnerable members at the Real Canadian Super Sores.

WARNING: This article contains disturbing facts, naked truths and coarse language. It may not be suitable for spineless union machine heads. Reader discretion is advised.

Our analysis of the RCSS deal will focus on what the UFCW negotiated for part-time workers at the RCSS's. Given the high percentage of part-time workers in the retail industry in general, it's safe to assume that corporate Canada's answer to Wal-Mart isn't going to be overrun by full-time staff. We're going to zoom in on part-timers employed in the RCSS department store type merchandise (DSTM) area where the work performed by the UFCW-represented part-timers most closely resembles that performed by workers in Wal-Mart's lowest wage category. We'll start with a look at their wages and, in the next three installments, at the benefits that these UFCW-represented workers will be receiving (or not) and at the management-friendly language the UFCW agreed to - all of which pretty much assures that the RCSS's will be a low wage, high turnover retail wasteland... just like Wal-Mart... but maybe worse... you be the judge. We'll cap off this feature with a look back at the spin doctoring the UFCW did to "sell" its done deal to its members.

This a copy of Wal-Mart's pay scale (pdf) for Toronto area stores effective September 7, 2002. We don't know if this scale has been adjusted since then. For purposes of this analysis, we'll assume that it hasn't and that these rates are still in effect.

The pay scale covers 4 "job groups". We're going to focus on Group 1 which includes:

  • Satellite Register Operators
  • Sales Associates
  • Stock Associates
  • Assemblers
  • Day/Night Unloaders
  • Day/Night Stockers
  • Fitting Room/Switchboard
  • People Greeters
  • ICS Team Associates
  • Flower Shop Associates
  • Temporary Set-Up
  • Stockperson/Cartpusher
  • Softline Processor

The scale has a wage progression for each of the four groups that starts with a minimum hiring rate and progresses at 20 cent per hour increments after each year of service.

The hiring rate for Group 1 is $8.00 hour. The top rate, after 10 years of service, is $10.00 per hour. You can see this progression in the first row for Job Group 1.

In addition to the hourly rate, workers are eligible for annual pay increases of up to 50 cents per hour based on their work performance. A box in the upper right corner of the scale shows the performance pay scheme: 0 for poor performance, 20 cents per hour for improving performance, 30 cents per hour for good performance, 40 cents per hour for excellent, and 50 cents per hour for outstanding performance. (Sit tight all of you who are thinking, "but it's not fair to take that into account - with the RCSS deal, it's more than fair, and we'll tell you why in a minute.)

The second row for Job Group 1 shows the wage progression for workers who get the 30 cent per hour increase for good performance. Assuming steady good performance, a worker in Group 1 can move to $9.00 per hour in 2 years, $10.00 per hour in 4 years, $13.00 per hour in 10 years and a "long term maximum" of $14.00 per hour after 10 years.

Let's compare Wal-Mart Group 1 workers at to UFCW-represented part-timers at Loblaws Real Canadian Super Stores.

The deplorable RCSS deal contains separate pay schedules for RCSS part-timers in the Food Department, DSTM department and for part-time meat cutters and bakers. Unlike the Wal-Mart schedules, pay increases are based on hours worked and not years of service.

Note: To fully appreciate the UFCW's bargaining know-how, the minimum wage in Ontario was $7.00 per hour at the time the RCSS was done. In February 2004, the minimum wage increased to $7.15 per hour.

This is the pay scale for RCSS Part-Time Food Department workers effective June 29, 2003:

  • 0 to 300 hours- $7.00
  • 301 to 650 - $7.10
  • 651 to 1300 - $7.25
  • 1301 to 1950 - $7.50
  • 1951 to 2600 - $7.75
  • 2601 to 3250 - $8.00
  • 3251 to 3900 - $8.25
  • 3901 to 4550 - $8.50
  • 4551 to 5200 - $8.75
  • 5201 to 5850 - $9.00
  • 5851 to 6500 - $9.25
  • Over 6501 hrs.- $11.49

Workers with more than 6501 hours get an increase to $11.79 in June 2004 and $12.09 in June 2005.

This is the pay scale for RCSS Part-Time Department Store Merchandise workers effective June 29, 2003:

  • 0 to 500 hours - $7.10
  • 501 to 1250- $7.30
  • 1251 to 2000 - $7.50
  • 2001 to 2750 - $7.70
  • 2751 to 3500 - $7.90
  • 3501 to 4250 - $8.10
  • 4251 to 5000 - $8.30
  • 5001 to 5750 - $8.50
  • 5751 to 6500 - $8.80
  • 6501 to 7250 - $9.10
  • 7251 to 8000 - $9.40
  • 8001 to 8750 - $9.70
  • Over 8750 hrs. - $10.00

Based on this unpleasant data, the following unpleasant facts emerge:

Starting Rates at Loblaws Ontario RCSS's are Lower Than Starting Rates at Wal-Mart Stores:

As of September 2002, the starting rate for workers in Group 1 at Wal-Mart was $8.00 per hour.

According to the RCSS deal which went into effect in June 2003:

  • The starting rate for Department Store Merchandise workers is $7.00 per hour.
  • The starting rate for Food Department workers is $7.10 per hour.

Thankfully, both of these rates have since increased to $7.15 per hour as a result of an increase in the Ontario minimum wage.

It will take an RCSS part-timer hired in 2004 at least two years to earn the $8.00 per hour that a Wal-Mart Group 1 worker was earning upon being hired in 2002.

  • A part-time DSTM worker reaches $8.10 at 3501 hours - that's just under 6 years if she works 12 hours per week and 2.75 years if she works 24 hours per week.
  • A part-time food department worker reaches $8.00 per hour after 2601 hours - that's just over 4 years if she works 12 hours a week and just over 2 years if she works 24 hours per week.

By the time that these RCSS workers (hired in 2004) reach Wal-Mart's 2002 hiring rate of $8.00, Wal-Mart Group 1 workers (hired at the same time) will be earning a base rate of $8.40 or $9.00 per hour if they received "good" performance ratings in each of their 2 years of service.

Worse yet, these RCSS part-timers will stay at minimum wage anywhere from 1 to 2 years depending on their weekly hours.

The Wal-Mart scale provides for pay-for-performance increments that workers are to receive - the RCSS deal doesn't:

You may be wondering why we're including the pay-for-performance component of the Wal-Mart pay scheme in our comparison, given that such things are very uncommon in collective agreements. Hold on to your stomachs, here comes Article 13.03!

13.03 The Company may, from time to time, introduce incentive programs in addition to the prevailing wage schedules.

Nothing further is said about these "incentive programs" in the RCSS deal. That being the case, the company can introduce whatever kind of incentive pay program it wants and pay whatever it wants to whichever workers it deems deserving based on whatever criteria it chooses to use - just like in a non-union workplace.

The likelihood that this can happen under the RCSS deal is reinforced by a rather unusual header above the wage scales for these part-timers:

"The following shall be the minimum part time rates of pay for [these] employees for the duration of the collective agreement".

The use of the word "minimum" suggests that higher rates can be paid although there is no reference to when, where or under what circumstances it can do so. Then there's this innovative clause:

13.02 When the Company pays a new employee more than the starting rate in his classification, such employee shall (for purpose of wage progression only) receive wage increases in accordance with the wage schedule and be deemed to have the appropriate service.

(emphasis added)

In the absence of any qualifiers about just when the company can pay new employees more than the starting rate, this means that store managers are free to hire employees at higher rates and those employees are treated as if they had actually worked the hours required to get to that rate while the rest of the peons have to bust their humps for several years to get there. Just like in a non-union workplace.

It takes longer for RCSS Workers to Get Raises than Wal-Mart Workers:

Wal-Mart Group 1 workers reach $9.00 per hour after 5 years of service (without performance pay) or after 2 years of service (with pay for good performance).

Part-time DSMT workers at the RCSS's reach $9.00 per hour after 6501 hours - a little over 10 years for those working 12 hours a week and a little over 5 years for those at 24 hours a week.

It can take RCSS workers about as long to reach the top rate for their jobs as Wal-Mart workers - sort of:

A Wal-Mart worker in Group 1 reaches a top rate of $10.00 hour after 10 years of service (without pay for performance) or 4 years with pay for "good performance" in each year.

A part-time DSTM worker working 12 hours per week will take just over 14 years to reach a top rate of $10.00 per hour.

A part-time DSTM worker working 24 hours per week will reach the top rate in just over 7 years.

The high end is where things begin to equalize between workers at the two Evil Empires. We think that's because few workers are expected to stay that long (or wanted to stay that long) with either company.

Front End Service Workers Get Less at RCSS

According to one of the numerous Letters of Understanding attached in the RCSS deal, part-timers who work in front end service (bagging, carry out, parcel pick up, buggy retrieval, clean-up, sweeping and washing, replenishing bags, bottle and can sorting, price checks, assembly of grocery orders and product returns), are to be "paid according the part-time wage progression as specified in Article 13.04 to a maximum of $9.50 per hour".

LOU #55 doesn't say which of the wage schedules is the applicable one, so we don't know whether it's the one for Food Department or the DSTM Department. Neither of those schedules actually has a rate of $9.50 per hour. (Maybe that's to make the front end workers feel even more special.)

The kind of work described as Front End Service in the RCSS deal fits pretty well into Wal-Mart's Group 1 which pay a max of $10.00 per hour or $13.00 per hour with good performance ratings.

RCSS Part-timers Get To Pay The UFCW For This Amazing Contract

On the heels of the RCSS deal in July 2003, UFCW Local 1000a jacked up its union dues. Local 1000a members, including the minimum-wage-earning RCSS part-timers will pay:

  • $5.72 per week - those working up to and including 12 hours per week.
  • $6.97 per week - those working more than 12 hours up to and including 24 hours per week.
  • $7.47 per week - those working over 24 hours per week.

When you slice these dues off the pay checks of minimum wage earners, their pay nets out to less than minimum wage but the labour-management cronies get fattest off of the poorest of their workers and members. Notice that the company can keep the 12 hour per week part-timers at minimum wage the longest? Notice how two 12 hour per week part-timers generate more dues revenue for the UFCW than one 24 hour per week part-timer and how any two part-timers bring in more than one full-timer?

With the RCSS deal, everybody wins! Except the workers. It's craptastic.

Coming Up Next: Benefits You Won't Get

© 2017 Members for Democracy