When Patrick Kearney moved to Burlington in 2016, the only place he wanted to work was City Market, Onion River Co-op. The member-owned grocery store has a bargaining unit. As a union man through and through, Kearney wanted in.
Kearney came with 11 years of experience at a Hanover, N.H., co-op where he and his coworkers had tried, and failed, to organize a union. Kearney assumed it would be different in Burlington, where being a card-carrying member of City Market is a symbol, if not a stereotype, of holding the city’s progressive ideals.
Surely the co-op culture — one of profit-sharing and charitable giving — would mean employees were valued. The Burlington fixture known as City Markup could certainly pay employees a livable wage when a bottle of Queen City-made kombucha costs seven bucks.
Right?
Kearney, who is 68, earns $12.51 an hour as a produce stocker at City Market’s South End store. According to a financial analysis he compiled in January, just over half of City Market’s 270 union members make less than $13 an hour. The lowest-paid among them, such as baggers and third-shift cleaners, make $11 an hour — just 22 cents more than Vermont’s minimum wage.
Kearney and his fellow union negotiators say that’s not enough to live on, particularly in Vermont, where earners have to make more than twice that wage to afford a modest two-bedroom apartment, according to the National Low Income Housing Coalition. Kearney said he likes many of City Market’s ideals but that management doesn’t practice what it preaches when it comes to the workforce.
“They have not made employees’ welfare a priority,” he said.
The wage question has made for protracted negotiations with co-op management ever since the union’s contract expired in June. Workers are pushing for a three-year agreement that would give the lowest-paid employees a $15-an-hour wage by July 2021.
But City Market’s leadership says that rate is wholly unsustainable. They countered with $12.44 an hour. Leaders say the co-op’s generous benefits make up for lower wages.
“We are trying to find a way forward,” general manager John Tashiro said last week.
City Market workers aren’t alone in catching the Fight for $15 fever. A majority of Vermont lawmakers supported a $15 minimum wage proposal this legislative session, but House and Senate leaders couldn’t resolve their differences on the issue before adjournment. Gov. Phil Scott vetoed a similar measure in 2018. And nationally, the $15 minimum wage question has become a benchmark on which to judge the field of Democratic presidential nominees.
That’s exactly why City Market union vice president Meaghan Diffenderfer doesn’t think the ask is out of touch.
“[City Market] is seen as this precedent-setter,” said Diffenderfer, who is 25 and makes $13.80 an hour in the co-op’s finance department. “If folks are going to look to us about what other markets should be paying, we should live to the co-op values and provide a good wage.”
Colleen Knowles, the union president and a produce stocker, says her rent for a two-bedroom in Burlington’s Old North End consumes more than half of her monthly income, even with a roommate. She makes $12.20 an hour, a fact she displays during work hours on a giant pin affixed to her T-shirt.
“I am very thinly scraping by,” Knowles said. “It’s completely unacceptable that management is allowing its employees to live like this.”
Union members say City Market’s starting wages aren’t in line with accepted standards such as Burlington’s $14.44 livable wage rate. That’s how much contractors seeking to do business with city government must pay workers, but the requirement doesn’t apply to private companies. Nor are co-op wages at or above the $13.34 an hour that the Vermont Legislative Joint Fiscal Office calculated is what a member of a two-person household must earn to afford their basic needs.
Founded in 1973, the co-op is member-owned and has long prided itself on its guiding principles of independence, social responsibility and equality. The company donated nearly $377,000 to local nonprofits last fiscal year, according to its 2018 annual report. The bulk came from its Rally for Change program, which asks customers to round up their totals at the register for a local charity such as the Chittenden Emergency Food Shelf.
City Market also shares its profit with member-owners, though the patronage refund program is on hold while it pays off a $10 million loan for the South End store, which opened in 2017.
The original 16,000-square-foot store on South Winooski Avenue has been a downtown institution since 2002. Workers formed a union two years after it opened. Members are represented by the United Electrical, Radio & Machine Workers of America.
Sen. Chris Pearson (P/D-Chittenden), a Burlington resident and City Market member, has long lobbied for a $15 minimum wage, and he cosponsored the Senate bill that would have achieved it by January 2024. He supports the workers’ fight because, he said, it’s difficult to get by in Chittenden County with anything below that.
“The bottom line is, when you’re working full time, you should be able to afford to live in your community,” Pearson said. “I hope that is the focus of their discussion, and if not, co-op members need to really be made to understand what’s happening in our supermarket.”
But Tashiro, the general manager, said the calculus also has to take worker benefits into account.
City Market pays 90 percent of health care premiums for employees making $15 or more an hour and kicks in an additional 5 percent for those in the $12.01 to $14.99 range; anyone who makes less doesn’t contribute a cent. City Market management, however, has proposed reducing those contributions in contract talks, Tashiro said.
All workers can accrue up to four weeks’ paid vacation to start, and they receive a 6 percent 401k match after a year and an 18 percent employee discount.
City Market raked in $48 million in sales in 2018, but Tashiro said there isn’t much to spare after the co-op pays its bills. Like many retailers, City Market typically has a 3 percent profit margin, but all of that is being poured into the construction loan for the South End store. The co-op is expected to operate at a loss for the next few years.
City Market’s board of directors doesn’t sit at the bargaining table — it only ratifies the finished contract — but members are kept apprised of sticking points. Board president Faye Mack said the co-op offers more robust benefits than many retailers but also recognizes that Burlington is an expensive place to live.
“I believe both sides are really committed to try to figure out what the best salary structure is for sustainable employment,” she said.
Union member John Donoghue acknowledges that City Market benefits are generous, saying he’s known several co-op workers who have defected to other downtown businesses only to come crawling back for the free health care. Still, “City Market doesn’t offer those benefits,” Donoghue said. “We as a union negotiated for them.”
Donoghue, who makes $19.64 an hour as a graphic artist for the market, knows Burlington’s affordability problem isn’t City Market’s alone to solve. But he thinks the co-op should use some of its goodwill capital to at least try.
“We strive to be a leader in the community,” Donoghue said. “It seems to me a good opportunity for the co-op to be a leader in the community in this way, too.”
Erin Sigrist, president of the Vermont Retail & Grocers Association, a lobbying outfit that opposes the $15 wage, says it’s not as simple as awarding employees a raise. That money has to come from somewhere, she said, and businesses can only boost their profits in so many ways. They need to attract new customers, upsell existing ones or lure them in more frequently, or they can raise prices on goods — a hard sell in an age when online retailers are bankrupting local brick-and-mortar stores.
“[This] needs to be a discussion about a total compensation package,” Sigrist said. “There are so many employers out there that are providing valuable benefits that translate to more than just a $2 increase per hour.”
But the base wage matters to Kearney. He said City Market wages are too low to keep anyone for long and suspects the co-op’s business model relies on this, since workers leave well before they top out the wage scale. City Market does award annual raises, but using management’s proposed wage scale, it would take an entry-level bagger six years to hit the $15 mark, Kearney said.
“What are you supposed to do in the meantime?” he said. “How do you save for retirement? How do you keep up with your rent and fix your car?”
He believes in the Fight for $15, but Kearney isn’t sure he can stick it out long enough to reap the benefits should the union succeed. Kearney figures that he and his wife, who works at Zabby & Elf’s Stone Soup downtown, only have enough saved to live on for two years after they retire.
After 51 years in the workforce and never making a livable wage, Kearney says he feels like he’s in an inner tube heading for a steep waterfall — staying afloat but on a path to ruin. He hopes that by the parties’ next negotiation session on September 6, management will have found a way to pay employees what they need.
“They have a budget, and they decide how to spend it,” Kearney said. “We’re just saying it’s our turn.”
Correction, August 28, 2019: A previous version of this story misstated the reason the minimum wage bill did not pass earlier this year.
The original print version of this article was headlined “City Market Rate | Union pushes for $15-an-hour wages at Burlington co-op”
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This article appears in Aug 28 – Sep 3, 2019.
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Thank you to all my coworkers, who are all wonderful rank-and-file leaders, who spoke out in this piece. One note is that the yearly raises are also NEGOTIATED and fiercely fought for and defended by our democratic union. Who are we? UE!
It took me 6 years of full-time work, three contracts with fierce wage advocacy by workers, and a three-grade promotion to meat cutter to finally reach $15. I now make $15.14 and can afford to live in the ONE with a great roommate, but only if I am paying the income dependent school loan rate which means I remain out of default, but am actually accruing debt on my principle balance. Our union puts the coop values INTO PRACTICE every day. We are here to stay, and we are empowered. Solidarity forever with our comrades at UE Local 255 at Hunger Mtn Coop in Montpelier.
(Also, please note that kitchen workers at the south end had to march on their boss with a petition to protest bad treatment and conditions while a certain commenter and others were employed in management of that department.)
What are their benefits worth per hour?
I didn’t think that minimum wage bill even made to the Governor’s desk. I thought it was the one from the session before that got vetoed. Am I wrong?
Hi @Gabe, You’re absolutely right. We got mixed up here. We’ve corrected the story. Thanks for letting us know.
Yeah, so not that this lets CM off the hook (How disproportionate are the salaries in the top positions to the waged positions below?), but the state isn’t exactly leading by example. Flipped all those seats and ended up with moderate, ultra incrementalists who wouldn’t deliver a progressive bill to the Governor’s desk. Not as progressive as the one that got vetoed. Of course, M. Johnson basically said on VPR, that bill was an unrealistic, idealistic progressive political statement that was allowed to get to the Governor’s desk precisely because leadership knew it would be vetoed. And this was said after the fact, after the illusory intent of that bill galvanized voters to elect and re-elect the very people who would fail to deliver the next time around.
This is shameful.
As a long-time City Market member, I almost always “round up” at the register for Rally for Change, even if I’m only a few cents over the whole dollar amount.
Now, it seems, many of the wonderful employees who are ringing up my purchases and stocking the shelves I select my items from, making my sandwiches and preparing other pre-made food I buy, probably need to use the services of the organizations I’m supporting with my donations.
Seems a little like that Walmart-sponsored food drive for its own employees.
Do the right thing, Mr. Tashiro.
Why not follow the Bernie approach: Just cut everyone’s hours until they are making $15 per hour.
How can this so called cooperative continue to justify underpaying their workers?
Could Mr. Tashiro’s Christmas bonus make up for the deficit if employees are paid a fair wage?!?
Keep up the good fight, folks! Thanks for the coverage SevenDays!
All I see here is a housing issue. The cost of living is completely out of control for this area. $1,200 a month rent for a dilapidated 1 bedroom apartment should be illegal. The state needs to fix the housing costs.
Agreed, housing is the issue here. Landlords are getting far too much for rental units. but it’s a vicious cycle, renter’s trash a place and the landlord is left holding the bag or a renter fails to pay rent and the landlord still has their expense.
Most important, no one is going to take care of you expect you. IN my career I worked two jobs but always had the goal of bettering myself and did so. I would like to lay on a beach and have someone pay my bills but that is not going to happen. You have to start at the bottom of the ladder but it doesn’t mean you have to stay there.
This is a failure of not only City Market management, but also of a City Council that constantly kneels and cowers before landlords by refusing to implement any kind of rent control. Miro-nomics isn’t much different than Trump-o-nomics: the rich get the best and none for the rest.
Boycott City Market and remove city councilors who oppose rent control.
I’m fine with them getting paid more, but they should expect a considerable decrease in their benefits to make up for it. Also, the union negotiated their current pay and benefits, so… is their issue really with the union? I assume they pay union dues, but they can’t expect City Market to compensate them for those.
Here is the list of employee benefits from the City Market website:
“Employee Benefits
A few of our benefits include:
Health Insurance (90-100% of premiums covered for employees and 80% of premiums covered for dependents)
Dental and Vision Care
Short and Long-Term Disability
Flexible Spending Accounts, including medical, dependent care, and parking reimbursement accounts
401(k) with 6% employer match and full vesting after three years
Life Insurance
Employee Assistance Program
Supplemental insurances: whole life and accident
City Market charge account
20 Days of Paid Time Off (PTO) per year to start
Mass transit and bicycle transit reimbursement
Store discounts
Fitness Center discounts
Anniversary gift”
“The Oracle” gives a list of benefits at City Market. It includes 20 paid days off a year. Are they talking about
8-hour days? 160 free hours? [At $12 an hour, that would be $1,920. At 14 an hour it would be $2,240.] Or are these part-time jobs, so the bonus would be a lot less? I wonder if the workers would rather have the money than the paid days off – perhaps the Union could negotiate their having a choice: to get either the paid days off or a raise…
Of course, if these are not full-time jobs, the math changes quite a bit.
Absolutely free healthcare? Thats a yuuuuge benefit. Employee healthcare insurance premiums are a staggeringly huge cost for employers these days. Im glad CM offers that benefit, but it should be understood how much value it adds to an employees overall compensation package. I dont get free healthcare and Ive been in the workforce since the 1980s.
All of that said, I support $15/hour.
I have also said that housing is a huge problem. Landlords are allowed to charge outrageous prices for dumps they call liveable apartments. But they charge so much because they know the college kids will pay that much. Burlington does need rent control and better inspections of the apartments!
As a Burlington landlord I have no problem with rent control – just so long as I can increase my rents by the same amount the schools can increase their taxes. School taxes go up 10%, so can my rents. Maybe then renters will have some understanding of the impact of constantly increasing Burlington’s school taxes and vote the pocketbook they claim to care about so much.
I wonder what the cost of that free healthcare is on the other side. It’s just words if the co-pay and/or deductible is high.
Personally, I’d like to see the colleges house more of their students. I’d also like to see a better mix of young professionals living in Burlington but making $12/hour at the local co-op sure isn’t going to draw them in.
“I’d also like to see a better mix of young professionals living in Burlington but making $12/hour at the local co-op sure isn’t going to draw them in.”
Nor will policies that make it economically unfeasible for anyone to build housing in the city. Look at the Help Wanted ads. Plenty of well-paying jobs in Burlington go untaken because there’s very little decent, affordable housing for young professionals.
I thought the young professionals were exactly who could afford the rents in Burlington. The Unaffordable
apartments, rather than the Affordable ones – above $1500 a month.
The ones who have most trouble finding apartments are the Young Urban Clerks, rather than the Young Urban Professionals.
[The bank west of the corner of Bank St. and Pine St. is largely converting to apartments soon – by 2022 I think they said. The news just came out the other day. It’s supposed to include both levels of Housing.]
Alan, what a generous proposal! Let me summarize: as an attorney with a home worth nearly 3/4 of a million dollars as well as other rental propert[y/ies] from which you receive passive income, you would be willing to support rent control as long as it doesn’t eat into your profits in order to give kids the support they need at school. A real philanthropist.
I like City Market but I have shopped there and observed the employees . Therefore I suggest they fire roughly a third of the employees who are incredibly lazy and useless . Pay the remaining workers the savings . Problem solved !
This is disappointing, if not at all surprising. I was recently pursuing the want ads and was struck by how low City Market’s hourly rate is. Yes, free insurance is definitely a plus, but at those pay rates, a lot of workers would already qualify for Medicaid. Maybe shoppers’ “round up” contributions should go to playing employees an actual living wage.
and WHY THE HELL NOT? Like they can’t afford it? They just built a new store- pay a fair wage!!!!!!!