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Penreco not just a symptom of future on health coverage

In years past, when a contract-negotiations stalemate occurred, the bogged-down talks between a company and its union usually were blamed on a disagreement over wages or, less frequently, over proposed work-rules changes.

One of the major causes, if not the major cause, of the three-month strike at the Penreco plant in Fairview Township that ended Wednesday was the stumbling block increasingly affecting contract negotiations in private industry and business, government and school systems. It is health care benefits.

Penreco wasn't the first, and it won't be the last, company to experience a prolonged strike over this increasingly difficult topic. Unfortunately for Penreco's 130 hourly workers, it took so long to reach a settlement; the workers walked off the job Feb. 13.

Ironically, the contract proposal to which the workers agreed during the past week reportedly was the one put on the bargaining table by a Penreco vice president on Feb. 9. The company's unwillingness to bend on the issue indicates the priority the issue has attained amid the company's overall financial objectives.

The same level of priority is evolving on the school district front. In the Butler School District, for example, a new five-year contract requires that teachers, for the first time, make monthly contributions to their health care benefits. An individual will pay $20 per month, and families will pay $30 per month.

Meanwhile, the new pact at Penreco requires workers to pay 20 percent of the premium and an estimated $2,500 deductible for family coverage, plus other costs.

A significant amount of the 2.5 percent pay raise for each of the three years of the new Penreco pact has been eaten by the losses workers incurred during their three-month strike. Only the workers themselves are privy to the thinking that finally caused them to decide that holding out for a better health care plan was not in their best interests, when weighed against the bigger picture.

Just as the traditional pension plans are giving way to options such as 401(k) plans, the day is not far in the future that virtually no workers — at least in the private sector — will be receiving health care benefits fully paid by their company.

Penreco is not just a symptom of what lies ahead. The reality already is well-entrenched, and, at least for non-management workers, the roots of the health care issue will continue to penetrate employee compensation packages in more and more companies.

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