Kaiser Permanente Reaches Pact With Unions and Averts Strike

Bloomberg — Kaiser Permanente reached a tentative agreement with unions, averting what could have been the largest strike yet this year. More than 35,000 workers, from pharmacists and nurses to locksmiths and janitors, were affected by the strike that was avoided.

According to the Alliance of Health Care Unions in a statement, Saturday’s joint statement stated that the health-care firm reached a 4-year agreement covering 50,000 workers in 22 local unions.

On Monday, workers planned to leave hospitals in the U.S. West Coast. This could have caused disruptions to a system of health care that was recovering from the Covid-19 outbreak and U.S. hospitals facing a fresh wave of infection heading into winter.
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“These were challenging negotiations, but this tentative agreement demonstrates the strength of our labor management partnership and the unique success it can achieve,” said Christian Meisner, senior vice president and chief human resources officer at Kaiser.

It includes the following:

In every region, guaranteed annual wage increases through 2025
There are no reductions in the health benefits
Maintaining retirement benefits
Additional bonus plans
Workload language, new safe staffing
Partly driven by tight labor markets and pandemic fatigue, workers are taking more aggressive labor action across the nation. They want better wages, benefits, and conditions. More than 100,000 workers have recently either threatened or gone on strike — including ongoing actions by 10,000 Deere & Co. employees and 1,400 workers from Kellogg Co.

Kaiser’s health-care workers helped carry the U.S. through the pandemic and “they should see a fair return on what is now a very, very profitable company,” AFL-CIO President Liz Shuler said in an interview on Bloomberg Television’s “Balance of Power With David Westin” on Friday. Workers are saying “enough is enough,” she said.

Two-Tier Pay

For the unions, the agreement alleviated issues including a contract proposed by Kaiser’s management, which included a 2% wage increase and established what union representatives called a two-tiered wage system that would compensate newer employees at lower rates than existing ones, or adjust rates based on where workers are located. The two-tiered system was eliminated by this agreement.

“This contract protects our patients, provides safe staffing, and guarantees fair wages and benefits for every alliance member,” said Hal Ruddick, executive director, Alliance of Health Care Unions.

After Senator Bernie Sanders, seven Democratic colleagues, and Vermont Senator Bernie Sanders spoke out against the proposed two-tiered salary structure and called on Kaiser to improve its pay offer, the tentative pact was signed. It could take many weeks before it is ratified. “Considering your recent profit margins, we find this offer to be demeaning and unacceptable,” they wrote.

Read: Kaiser Permanente Workers Deserve ‘Fair’ Deal: U.S. Senators

Kaiser said earlier that wages and benefits make up half of the institution’s total operating costs, and adjusting them will help lower the rising price of health-care. The company stated that its union-represented workers earn 26% more than the market average wage and, in certain places, 38% more.

Even though the number of walkouts in California, Oregon, Washington was larger than that, they would have joined the more than 750 Kaiser Stationery and Biomedical Engineers who had been pickingeting over the past two-months. There could be other one-day strikes.

Kaiser has long been considered “the nation’s largest, longest-lasting labor-management partnership” and the gold standard in how companies can work hand in hand with unions, Steven Greenhouse wrote in his book “Beaten Down, Worked Up.” That relationship has weakened in recent years, organizers said, as turnover at the executive level and the death in 2019 of Kaiser’s more union-friendly CEO, Bernard Tyson, meant institutional knowledge and support was lost.

Pandemic’s Impact

A lot of U.S. hospitals suffered before the pandemic. This was because elective procedures that were less profitable moved to outpatient facilities and rural hospitals dealt with an aging population. The pandemic caused normal operation to be halted and left facilities open for sicker patients.

A survey by health-care practice advisory firm BDO USA this year showed that only 27% of U.S. hospitals had more than 60 days’ cash on hand. American Hospital Association estimates that the epidemic will cost approximately 6,000 U.S.-based hospitals nearly $400 billion by year’s end.

Kaiser appears to have largely survived the turmoil, according to workers. Kaiser’s annual operating revenue reached $88.7 billion in 2020, compared with $47.9 billion in 2011, according to its annual report. Union leaders estimate that $6 million was earned per day by the health care system during the pandemic.

Surveys of over 20,000 healthcare workers in the aftermath of the pandemic revealed that almost half felt burned out. The effects were more severe for women working in nursing and other related fields. Another study found that 20%-30% of health-care professionals in front were contemplating quitting the job.

This disillusionment, coupled with a shortage in the workforce, has made workers feel stressed, even though it could cause widespread disruption for patients.

“The direct care workforce does not take striking lightly because they’re really committed to their patients,” said Eileen Boris, the Hull Chair and a professor of feminist studies and history at the University of California at Santa Barbara. “But they understand that the conditions of work are also the conditions of care.”

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–With assistance from Josh Eidelson and Lauren Coleman-Lochner.


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