In California, grocery clerks may check out

In this gritty border town where the typical household income is less than $30,000, it's hard to tell the countless minimum-wage jobs apart. That is, unless you happen to bag groceries at the Ralphs supermarket by the freeway.

Just ask Lea H., a mother of three who spends her days asking "paper or plastic?" At $6.75 an hour, the pay isn't great. But she pays no premiums for health insurance. She gets extra pay for working Sundays or nights. If she is promoted from bagger to checkout clerk, she can look forward to making $37,000 a year, plus triple-pay for holidays.

The supermarket is a good place to work, Lea says, much better than the mammoth Wal-Mart that just opened a few blocks away. To keep things that way, she's ready - raring even - to strike as soon as this weekend to prevent major cuts in pay and benefits proposed by management. "They're trying to scare us and it's not going to work," says Lea as she stands in an aisle, returning wayward groceries to their proper shelves.

A massive walkout may be inevitable if her colleagues at three grocery chains feel the same way. A union representing 70,000 grocery workers at Albertsons, Ralphs, and Vons markets in Southern California, has called for a strike vote that will end Thursday. The results will be released Friday morning.

At stake is the balance of power between labor unions and a supermarket industry that faces new competition from the likes of Wal-Mart and Target. The battle here, as three big grocery chains push for union concessions, reflects a larger tension nationwide between cost- conscious employers and workers worried about a race-to-the-bottom in wages.

"In general, the US food retailers are under a lot of pressure to reduce cost, and labor is one of the few variables they have much ability to do that with," says David Schroeder, a grocery-industry analyst with Dominion Bond Rating Service in Toronto.

If the strike is called by The United Food and Commercial Workers Union, 859 supermarkets as far north as San Luis Obispo, Calif., plan to use replacement workers who are currently being trained. Citizens looking for milk or eggs may have no choice but to brave picket lines, as the three targeted chains dominate the region's market.

While they're divided over pay, benefits, and pensions, the grocers and the union do agree on the threat posed by Wal-Mart, which hopes to boost its market share in the state by opening superstores that sell groceries. Undeterred by failed union drives, Wal-Mart spends less on labor than major Southern California chains, which should allow it to woo customers with lower prices.

To compete, the dominant chains will have to cut their labor costs, which aren't even on "the same planet" as those of Wal-Mart, says Mark Husson, who analyzes the industry for Merrill Lynch. "It may be three, four, or five years before Wal-Mart has a significant impact on the California market. But if they wait to try to change those costs then, it will be too late."

The three targeted chains agree. "There's been a significant change in the retail landscape. In order for us to remain competitive, we have to even the playing field," says Vons spokeswoman Sandra Calderon.

Until talks broke off on Sunday, the chains were pushing the union to accept insurance premiums, higher deductibles and co-pays for doctor visits, and a lower pay scale for new employees.

On the other side, the union's attitude - at least away from the give-and-take of the contract negotiations - is best expressed by the button on Lea's lapel. "No concessions," it says.

"We are there to serve the public, and we do a very, very good job of it," says Greg Conger, a former meat cutter who now runs the food worker union local that serves a large chunk of the Los Angeles region. "We don't have to be ashamed of what we've been able to negotiate over 60 years. We believe we've earned it."

As for the Wal-Mart threat, Conger will believe it when he sees it. Right now, the unionized chains control 75 percent of Southern California's market. "These people are only competing against one another."

Lea, the bagger at Ralphs, isn't worried about America's largest retailer either. The grocery chains "are just using Wal-Mart as an excuse to get what they want," she says.

Who will win the battle of wills? Some experts predict the union will give in. "They're going to have to concede on some points," says Mr. Schroeder.

Regardless of the outcome, the strife in Southern California won't mark the end of attempts to trim back labor costs at supermarkets, says Paul Clark, professor of labor studies and industrial relations at Penn State University, in University Park, Penn. "It's going to get worse as Wal-Mart opens stores in every conceivable market," he says. "This is a problem that's not going to go away."