The UFCW’s massively underfunded pensions are likely to only get worse if Amazon’s Whole Foods Deal goes through.
When online retailer Amazon announced last month that it would be buying Whole Foods for $13.4 billion, the progressive establishment went into overdrive to find reasons to try to block the purchase.
“Amazon’s takeover of Whole Foods sent the stock of competing grocery chains plummeting,” reports Vox.
Amazon, with its lack of concern about making a profit, “is going to be devastating to competitors who have to.”
In an industry known for its extremely small profit margins of only one or two percent, unionized grocers especially have much to worry about Amazon’s Whole Food deal.
“In addition to merging Amazon’s delivery capabilities with a large grocer,” a writer at Daily Kos noted, “the Whole Foods acquisition provides Amazon with nearly 500 brick-and-mortar outlets for its other retail products.”
Over the years, unionized grocers have taken a beating from non-union supermarkets and retail giants like Target and Walmart entering the grocery business, causing many to close stores and lay off workers.
This beat down has also resulted in a tremendous losses in the industry-wide union density that the United Food and Commercial Workers (UFCW) once had.
This is likely why UFCW president Mark Perrone has called upon the Federal Trade Commission to “review” the Amazon-Whole Foods merger.
Because of the impact of online shopping, technology, and automation, our economy and the retail grocery landscape is changing dramatically. As such, the very definition of how mergers, such as the proposed Amazon and Whole Foods merger, would impact grocery competition, customer choice, the price of goods, and, especially hard-working retail workers must be rethought.
While traditional analysis may discount the threats that would arise from Amazon’s acquisition of Whole Foods, Amazon is not a traditional retailer or grocer.
Due to the loss of market share caused by non-union grocers entering the market, as well as the growth of online sales, as the union density in the supermarket industry shrank, so too has the UFCW’s pension assets.
Today, after years of decline, many of the pension funds the UFCW controls are now (collectively) underfunded by billions of dollars.
If the Amazon-Whole Foods deal goes through, the UFCW is likely to see even more jobs disappear, putting the union’s already-underfunded pensions at greater risk of default.
Here are but a few examples (via FreeErisa.com) of several of the larger UFCW pensions that are underfunded:
The UFCW Industry Pension Plan is nearly $4 billion underfunded.
The UFCW pension plan for Southern California is over $6.5 billion underfunded.
The UFCW pension plan for Northern California is nearly $5.9 billion underfunded.
The UFCW’s Desert States pension plan is only $871 million underfunded.
The UFCW’s pension for the Rocky Mountain states is nearly $840 million underfunded.
The UFCW’s Tri-State pension plan for Pennsylvania and surrounding states is over $914 million under funded.
Even the UFCW’s pension plan for its own employees is underfunded by over $743 million, which is fairly unusual.
Thanks to the UFCW and other progressives—including Congressional Democrats—crying to the FTC about the Amazon-Whole Foods deal, it may take quite a while for the deal to clear the regulatory hurdles.
However, once it does, for a union like the UFCW, which is dependent on having viable employers to fund its pension plans, the Amazon-Whole Foods deal may bring down its house of cards.