Mary Dixon: When the grocery giants Kroger and Albertsons announced a nearly $25 billion merger last month, many groups worried the deal would give the company's too much power. In fact, a group of attorneys general including Illinois' are suing to block it in Chicago where the merger would mean Jewel-Osco and Mariano's chains becoming one. Labor unions have expressed concerns about jobs. To learn more WBEZ's Esther Yoon-Ji Kang talked with Alison Dickson. She teaches in the School of Labor and Employment Relations at the University of Illinois, Urbana Champaign.
Esther Yoon-Ji Kang: Some lawmakers are calling on the Biden administration to block the merger. So how likely is it that this will actually happen after all?
Alison Dickson: I certainly don't have a crystal ball. But we know that the Federal Trade Commission under President Biden has been more cautious and more critical of mergers of this size. And so I think it will be an uphill battle for them to win approval.
Esther Yoon-Ji Kang: So labor groups often cite the bankruptcy of Haggen, a retailer in Washington that merged with Safeway in 2014. And the company ended up filing for bankruptcy a year later, closing many stores and blaming Albertsons, which owns Safeway for driving it out of business. That obviously impacted the workers directly. How do mergers like this typically affect jobs?
Alison Dickson: Historically, mergers of this size and scope have resulted in fairly negative impacts on both workers and on the public. We know that when you're merging union contracts, and so at least two union contracts in Chicagoland area, there are a lot of bargaining complications. We tend to see that when you have integration of two big companies that inevitably job cuts will result. I think like, a lot of us can remember when Dominick's closed and how devastating that was for so many of our communities. I feel like I still refer to like the shopping bags as like Dominick's bags, I'm like "get me a plastic bag, give me a Dominick's bag." But that led to I think over 6,000 union workers losing their jobs. And in order to win approval for this merger from the FTC, there will likely be store closings in markets where these two companies have already a lot of presence.
Esther Yoon-Ji Kang: Here in the Chicago area, the local 881 Chapter of the United Food and Commercial Workers Union, which represents thousands of grocery workers, said it strongly opposes the merger because it threatens jobs, but also it hurts communities. What are some ways mergers have hurt communities in the past?
Alison Dickson: We know that we already have an issue in Chicago that certain neighborhoods on the West and the South Sides have long been food deserts. And so a merger of this size, which will likely result in some store closures, could only exacerbate those those existing food desert areas. We know that workers and their families and other community members are already experiencing record inflation. And so these folks are going to be especially susceptible to further increases when we have, you know, the potential for a large grocery monopoly.
Esther Yoon-Ji Kang: And this idea of delivered groceries has grown a lot especially during the pandemic. Could this merger then shape the labor market in creating more drivers and delivery people?
Alison Dickson: Potentially it could and I think what matters the most here is how these drivers are classified how their employment status is classified. So if they are being thought of and treated as independent contractors, like Instacart drivers, that's going to have profound ripple effects throughout our local economy.
Mary Dixon: That's University of Illinois labor researcher Allison Dickson speaking with WBEZ's Esther Yoon-Ji Kang. This is WBEZ.
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