Market Basket’s troubled summer shows how regional drama affects lower job growth across the whole US

US employment payrolls drop because of strikes at one supermarket chain

August was the worst month for US jobs this year. August’s jobs report, finding that just 142,000 jobs have been added, ended a six-month streak of 200,000 plus jobs growth.

The reason for the dip? In part, a corporate family spat and weeks of worker protests over who would be the CEO chain of northeastern supermarkets, Market Basket.



“Employment at food and beverage stores fell 17,100, driven by ‘employment’ disruptions at a major grocery chain in new England,” wrote Doug Handler, chief US economist at IHS Global Insight.



“Typically, employment grows by about 7,000 [jobs] per month in this category.”



The incident shows how the US economy is so interconnected that even one company’s troubles can affect the national unemployment rate. Nor is it unusual: in 2011, strikes by Verizon employees also hurt national unemployment rates.



Granted, the Market Basket kerfuffle wasn’t just any protest. Market Basket is a chain of north-east supermarkets with 71 stores. Its employees walked off the job and created something of a statewide crisis by walking off to the job to protest the firing of the company’s CEO Arthur T Demoulas. By the end, the governor of Massachusetts had to get involved to broker a deal.



As the protest stretched on and shelves remained empty, the company cut hours of part-time workers – who then became eligible for unemployment benefits. State officials in both New Hampshire and Massachusetts encouraged affected workers to apply for unemployment insurance while striking. Ironically, even as some workers saw their hours cut, on 4 August Market Basket held a job fair to recruit new employees.

Market Basket, which is hardly a household name in the US, shows the power of mid-size companies on local economies. Market Basket employs 25,000 people at 41 stores in Massachusetts, 29 stores in New Hampshire and a single store in Maine. According to Gloucester Times, about 20,000 part-time workers saw their hours cut at the beginning of August due to the ongoing protest. That same week, the New Hampshire unemployment office announced that by 8 August, 227 workers had filed for unemployment. By 25 August, that number increased to 1,500. About 8,000 of New Hampshire workers saw their hours cut.

Massachusetts will release its unemployment statistics later in September.

The Market Basket protest ended on 27 August, when the charismatic ousted CEO Arthur T made a comeback, reaching a deal to buy out a rival faction of his family, including his cousin, Arthur S Demoulas.



Handler expects that the deal might help restore September’s jobs numbers back to normal – and even add several thousand more jobs than normal.

“Since this disruption has been recently resolved, we expect that this negative will be reversed in next month’s report, potentially adding at least 30,000 jobs to this category in September,” he said.

Still, in a year of worker protests and strikes along with the rebirth of the union movement, Market Basket’s dent in the national employment numbers shows that worker movements do have an impact on America’s statistical economic history – even if it’s only for a month.

