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Southern California grocery workers have ratified by an 86 percent margin a contract that ends the longest-running grocery strike in U.S. history.

The some 70,000 employees at Safeway's Vons, Kroger's Ralphs, and Albertsons voted this weekend on the new contract proposal, which was agreed to by union negotiators late last week after two weeks of intensive discussions. The dispute was over compensation and health care benefits issues.

The three-year agreement provides that current union members will not have to make any contributions toward their premium health care plans in the first two years and will only need to pay between $5 to $15 in the third year if health care contributions in reserves are not sufficient to cover the costs. However, there now will be a second, lower tier of supermarket employees who will receive less pay and what the UFCW terms "inferior benefits."

New supermarket hires will have to pay about $9 a week for a basic health care plan and will make less than the average wages of $12 to $14 an hour earned by their veteran counterparts.

In addition, the supermarkets will contribute 35 percent toward employee pensions for new hires versus 65 percent for veteran employees. The supermarkets had previously contributed 100 percent to employee pension plans.

Experts say that the agreement is a setback for organized labor, and the ramifications will be felt in other markets and in other labor negotiations for years to come.
KC's View:
What's the over-under on how long it will take the three major chains to realize that this new contract will not have the kind of transformational impact on the way that they operate that will allow them to compete more effectively with Wal-Mart?

And what's the over-under on when the unions will realize that they were picketing the wrong retailer?

Six months from now, let's see how the consumer pie is being cut in Southern California.