Big Strike by US Healthcare Workers Cancelled as Unions Make a Deal

One of the United States' largest healthcare providers and hospital networks, Kaiser Permanente, reached a tentative agreement with an alliance of unions just two days before a massive strike over the introduction of a controversial wage system.

The Alliance of Health Care Unions and Kaiser Permanente, one of US's largest not-for-profit healthcare networks, agreed on a tentative four-year contract that includes pay raises, retirement benefits and measures to address understaffing. It also includes withdrawal of a two-tier wage system that would pay new hires up to a third less than current workers.

In the next few weeks, union members will vote to ratify the agreement, and If approved, it will be retroactive to October 1, 2021.

Thousands of employees at Kaiser Permanente in Oregon, California, Colorado and other states had threatened to stage a walkout on Monday over the network's plan to create a two-tiered wage system. The strike by over 35,000 healthcare workers across hundreds of facilities and pharmacies nationwide was cancelled after the two sides reached an agreement on November 13.

The four-year contract will cover nearly 50,000 Kaiser Permanente health care employees in 22 local unions, the company said in a statement.

"This agreement will mean patients will continue to receive the best care, and Alliance members will have the best jobs," Hal Ruddick, executive director of the Alliance union, said in the statement. "This contract protects our patients, provides safe staffing, and guarantees fair wages and benefits for every Alliance member," he added.

Christian Meisner, senior vice president and chief human resources officer at Kaiser Permanente, said, "This landmark agreement positions Kaiser Permanente for a successful future focused on providing high-quality health care that is affordable and accessible for our more than 12 million members and the communities we serve." He added, "These were challenging negotiations, but this tentative agreement demonstrates the strength of our Labor Management Partnership and the unique success it can achieve when we work together." 

According to Reuters, the Alliance had earlier said that the two-tiered wage system would have further deepened a staffing crisis amid the COVID-19 pandemic. Since the start of the pandemic, the healthcare industry has seen the loss of 5,24,000 jobs, according to the US Bureau of Labor Statistics. The nursing facilities are disproportionately affected by this crisis as only 1% of the nation's nursing homes and assisted living facilities have a full staff, according to a recent survey.

Kaiser's old proposal mandated that in case union members did not agree with the two-tier wage system, the current wage rate would be cut by 15% for all future hires, the People's Dispatch reported. However, this was not the first time the network had pushed a two-tier wage system, the report said, as Kaiser had to withdraw a similar two-tier plan after more than 80,000 workers decided to strike in 2019.

The new agreement between Kaiser and the union leaders was a big win for the healthcare workers. The agreement includes provisions for guaranteed wage increases for each year through 2025, health benefits, retirement income and employer-subsidised retiree medical benefit, the introduction of the annual Alliance Bonus Plan, new safe staffing and workload language and opportunities for career development.