Union Divide, Part 2: Pay gap divides labor chiefs

Union Divide, Part 2: Pay gap divides labor chiefs http://www.detnews.com/apps/pbcs.dll/article?AID=/20070815/BIZ/708150406
Powerful UAW pays its leader far less than a West Michigan grocery local
pays its boss.
Ron French and Mike Wilkinson / The Detroit News
Ricardo Thomas / The Detroit News
UAW President Ron Gettelfinger's salary reflects a long-standing culture at the UAW that perceives the union as a social movement. See full image
Ron Gettelfinger and Robert Potter are separated by philosophies and tax brackets.
As president of the United Auto Workers, Gettelfinger is one of the hardest working and most influential labor leaders in the nation. He meets with presidents, negotiates with CEOs and manages a $300 million organization with more than 500,000 workers.
As president of one union hall of the United Food and Commercial Workers, Potter had a much lower profile. He led a membership one-twentieth the size of the UAW, located in one state instead of 50, with the average member earning less than half as much as the typical UAW worker. Yet in 2005 Potter was paid about twice as much as Gettelfinger. The UAW president earned just more than $156,000 in total compensation that year; Potter, in his last full year as president of UFCW Local 951, made $305,000.
Despite being one of the most powerful union leaders in the nation, Gettelfinger earned less in 2006 than three people in Potter's one union hall.
Differences in union hall pay scales are often as glaring as the pay gap between union and non-union shops. Some labor organizations lavish their officers with high salaries and generous benefit packages unavailable to the rank-and-file, while others tie their compensation to that of their members assembling cars or building homes.
The disparity has less to do with economics than with the cultures that have developed in different labor organizations. Those differences are particularly pronounced today, as many union members face uncertain futures and shrinking paychecks.
How two of Michigan's largest unions pay their leaders -- and the philosophies behind those paychecks -- offers a glimpse into the inconsistent world of labor boss compensation.
Years ago, pay was similar
Thirty years ago, unionized autoworkers and grocery employees earned similar salaries.
Barb Mezzapelle worked for the now-shuttered Chatham grocery chain in Metro Detroit in the early 1970s. Chatham employees were members of one of several food-worker unions that later merged to form the UFCW.
Barely out of high school, Mezzapelle made $20,000 a year as a union-represented management trainee -- the equivalent of $96,000 today.
She recalls her father, a union electrician, was stunned at the size of his daughter's paycheck. So was she. "For a 20-year-old kid, that was a lot of money," Mezzapelle said. "They (the union) could negotiate anything and get it."
In the early 1970s, UAW workers, with generous overtime, could earn $20,000 a year. Over time, UAW salaries rose, while grocery wages fell.
By the time Mezzapelle left Chatham to start her own business a few years later, she and her family could have led a middle-class lifestyle on her grocery salary. By the time she returned recently to work an overnight shift as a cashier at Meijer, things had changed. She now earns $8.50 an hour -- far less than she made at a grocery store more than 30 years ago.
"It's like pennies compared to before," she said.
Indeed, the pay gap between autoworkers and grocery workers is now profound. While UAW members can make as much as $29 an hour plus generous health and retirement benefits, union workers at Kroger, Meijer and elsewhere can earn as little as minimum wage, $7.15 an hour, often pay more for health care and receive fewer benefits.
That is, unless you're a grocery union leader.
Union hall keeps its jobs
Tough times are nothing new for the cashiers, stockers and butchers of UFCW Local 951, the largest local in the state. Membership at the local, which primarily represents workers at Meijer, has dropped from about 40,000 in 2000 to 28,000 today. Some stores have closed, and those that remain employ fewer workers. Eliminating baggers from checkout lines cost 6,000 union jobs, according to Potter. Technological advances, such as self-serve check-out lines, have eliminated many more.
About the only place not losing jobs is the union hall. While the union local was losing 30 percent of its workers in six years, the number of union officers and employees dropped by four -- from 103 to 99. Most of those who remained continued to receive raises.
Current Local 951 President Marv Russow argues that it's the wrong time to cut union hall staff. The union has dedicated more employees to recruitment in an attempt to curb its membership decline. Those members who remain often are facing more economic struggles and need additional services from the union.
"You can't condense yourself to prosperity," said Russow, Potter's successor. "The key is finding ways to expand services to our union."
But as membership (and the corresponding dues) plummeted, the local has spent a higher and higher percentage of its $11.5 million budget on salaries. In 2000, Local 951 members paid $78 a year toward union hall salaries; by 2006, that figure had jumped to $91.32.
Emblematic of the local's pay gap was Potter. In 2004, union-represented lead store clerks at the top of the scale at Meijer received a 1.9 percent raise -- 35 cents an hour. That same year, Potter's total compensation increased 5.2 percent -- from $229,000 to $237,000. In 2005, when Meijer employees at the top of the scale received no raises, Potter's total compensation jumped 29 percent, reaching $305,000.
At most Meijer stores in Michigan, top pay is nearly $20 an hour for a butcher. Most make far less. Meanwhile, Potter has a condo in Grosse Pointe Park and a home on more than seven acres in Grand Haven. He owns four cars, including a Cadillac and a Corvette, according to Michigan Secretary of State records.
The Labor Department raised questions about the local's spending, including unreported income for Potter, who was president of Local 951 for 26 years before leaving last year to become chairman of the food industry's Joint Labor Management Committee.
"I'm not embarrassed or apologetic about what I make," Potter told The News. "Even at my highest salary, I was never in the top 20 in the UFCW in the country."
The UFCW's labor bosses are among the highest paid in the United States, with 33 officers making more than $200,000 in base salary in 2006 -- many of whom earned thousands more by drawing additional paychecks from the union's international office. The average UFCW member earns between $25,000 and $30,000 a year, with many at Michigan grocery stores earning less.
Potter believes Gettelfinger is underpaid for the work he does. He argues that comparing the UFCW with the UAW is misleading because different unions have different philosophies about compensating their leaders. He said he had to pay his staff at Local 951 well because "they get recruited" for other jobs, Potter said. "There was about a half dozen times when I was recruited for jobs that paid twice as much. You try to keep good people."
Two of those good people were Potter's son, Michael Potter, who earned $95,673 in total compensation in 2006 as communications director, and Tamara Vander Ark, who earned $121,467 in total compensation as an executive board member and representative. Vander Ark and the elder Potter live at the same address in Grand Haven, according to public records. Vander Ark declined to describe the nature of their relationship.
It's different for Gettelfinger
On the other side of the state, Gettelfinger finds himself in the news almost every day. His union's core industry has been under assault for decades and increasing pressure from Asian and European automakers has the Big Three crying that their unionized workers must concede -- again -- on benefits, pensions and wages in order to remain competitive.
For his efforts, Gettelfinger earned more than $158,000 in total compensation in 2006. Nearly 1,200 people in organized labor across the county and 33 in Michigan made more than Gettelfinger, who, in accordance with UAW bylaws, also declined about $37,000 in compensation for his role on the DaimlerChrysler supervisory board, the German equivalent of a board of directors.
"We do this job because we believe in what we're doing and not to get rich or have retirement homes here or there," said Elizabeth Bunn, the secretary-treasurer of the UAW, the No. 2 post at the union. She was paid about $135,000 last year.
Both Gettelfinger and Bunn were elected at the union's national convention in 2002 and were re-elected last year. Their compensation is set at the convention, with a formula for annual increases established then. Their raises have been modest, holding to cost of living.
"Our salaries come from dues dollars and that it is our obligation to the membership that we not be paid in some way that's disproportionate to what they're earning and that's recognition of just how hard our members work," Bunn said.
Since its inception, the UAW has been at the forefront of the labor movement, fighting for company-paid health and pension benefits and unemployment protection. Its comparatively high salaries, earned through strikes and contract negotiations, helped create Michigan's blue-collar middle class.
Gettelfinger's salary and that of other top UAW officials reflects a long-standing culture at the UAW that perceives the union as a social movement, rather than a job.
"It's not a job, it's a cause," Gettelfinger has said.
Reacting to stormy economic times causing the union to lose 150,000 members since 2000, the UAW's national headquarters has shed more than a sixth of its staff since 2002. "We have been really engaged in a lot of belt tightening," Bunn said.
Some belts aren't as tight as others. Gettelfinger isn't the highest paid UAW official in Michigan. That title goes to Ron Gajeski, recording secretary at Utica's Local 400 that has lost 5,000 members since 2001. Gajeski was paid a total of $173,904, including more than $10,000 for expenses. He said his 2006 pay was high because he cashed in some deferred compensation; he declined to answer other questions.
Two other officials of Local 400 make more than $138,000, records show. The local's bylaws, approved by the members, specify that top officials' pay is linked to some of the highest paid UAW officers at the national headquarters in Detroit.
Bylaws also grant $200 a week to the top four officers to cover gas, insurance and expenses. Other employees and union members get $65 or $35 weekly for similar expenses. Officers are eligible, like plant workers, for longevity pay and bonuses.
While the UAW doesn't have the eye-popping salaries earned by top UFCW labor bosses, it does have many officers making more than $100,000. Nearly 700 UAW officers and staff in Michigan alone have a total compensation from the union that exceeds $100,000, according to U.S. Department of Labor data. That data doesn't include other officials, estimated in the hundreds, who are appointed to union jobs paid by the Big Three. They are benefit and safety representatives and low-level union officials who sometimes are paid for 12-hour days, seven days a week. Many make more than $100,000 a year.
One local makes tough cuts
In Saginaw, the wrenching switch from General Motors Corp. to Delphi Corp. and then the concessionary deals made with the parts maker have triggered a belt-tightening. After Mike Hanley won a runoff election last year to become president of UAW Local 699 in Saginaw, he found that the local couldn't maintain its spending practices. Dues were down substantially. Most of the work force that had earned $29 an hour a year earlier had taken buyouts; new hires earned $14 an hour.
So Hanley, a former House Democratic leader in Lansing, helped rewrite the bylaws. His pay as president was cut. Instead of accepting 50 hours of pay from the plant, as the national UAW contract allowed, Hanley retired and takes his pension plus a roughly $30,000 salary from the union. The local also cut some perks, including the monthly $60 gas allowance for union officials. He slashed the number of hours union employees spend away from their jobs to work on union business (hours for which the union footed the bill). He now edits the local's newsletter himself, a job that the former president's daughter used to be paid $55,000 a year to do.
Hanley said there was little choice -- financially or philosophically.
"It (the changes) put us into the world where 90 percent of our workers live," Hanley said.
Those same economic realities are beginning to be felt at UFCW Local 951. Russow's base salary is $182,000 -- notably less than the $250,000 Potter earned in base salary in 2005, his last full year at the union hall.
Some veteran employees retired in 2006 (after being given sizeable bumps in salary to increase their pensions), and their replacements are earning 20 percent less.
Russow said the local is being "fiscally responsible."
"We didn't feel it was right to go to members and ask them to pay (us) more," Russow said.
"Certainly we make a good living, we're not denying that. But we have said, look, our members are going through some challenges, and we're not immune to that."
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