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Thursday, November 22, 2012

Hostess

Last week it was announced that Hostess would shut down and their brands would be liquidated.  Eighteen thousand people would lose their jobs and Twinkies will go away for a while before coming back made by Mexicans working for Bimbo.

It's a sad story, made sadder that this company has been in and out bankruptcy (mostly in) since 2004.  Of course, the usual suspects blamed the unions for rejecting the company's generous(?) offer of a 30% pay cut, this on top of the pay cuts the unions already agreed to.

It's cute and everything, and it fits well with a certain Romnian worldview, but it's wrong.  For one thing, that denies the traditional role between management and labor.  Labor does the work.  Management makes the decisions.  We can't blame the truck drivers and the bread cutters and the Twinkie fillers for management's failure to balance the books after nearly a decade, even with onerous work rules.

But consider this, from Jacobin magazine:
In a piece for Salon, Jake Blumgart interviewed a bakery worker who had been at the company for 14 years. “In 2005, before concessions I made $48,000, last year I made $34,000…. I would make $25,000 in five years if I took their offer. It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.

What we have here is a situation where a company offered a wage in the marketplace and couldn’t get any workers to accept it. Consequently, it went out of business. The word “competitive” gets thrown around a lot, often with the murkiest of meanings, but in this case there can be no doubt at all that a company, Hostess, was unable to pay a competitive wage. Ninety-two percent of its workers voted to walk out on their jobs rather than accept its wage, and they stayed out even after they were told it was the company’s final offer.
By all the canons of competitiveness, it was the company that was deluded. Hey, it’s a tough labor market out there. Hostess just couldn’t compete.
So while I can understand why people of a certain ideological bent are eager to blame the union's refusal to accept a pay cut as the final dagger in the heart of a beloved company, it's just not the case.

Fact is, if the company hadn't been able to collectively bargain for the first round of paycuts, their inability to pay their workers would have been apparent much, much earlier. Thanks to the unions, the company got everyone to say yes to a pay cut. If the company had to bargain individually with workers, it's entirely possible --guaranteed, even?-- that a sizable percentage of the workforce would say no and leave the company on their own accord.

So while it sucks that these guys are losing their jobs, there is a huge silver lining. Short-term, they're unemployed right before the holidays.

In the long run, though, they now have the opportunity to seek better employment at well-managed firms, which --and perhaps this doesn't need to be said--is better for their long-term prosperity than taking yet another pay cut to prop up a company run by nincompoops.

As the wise man said, better to die on your feet than live on your knees.

2 comments:

KickinAssTakingNames said...

Not quite a week before the company announced they were shutting down, there was the same brouhaha here at one of their factories. The workers went on strike and Hostess threatened them with axing their jobs and shutting down the factory within 24 hours. A scare tactic so they'd accept the deal. Didn't work. They stood their ground and the next day they lost their jobs and the place shut their doors. A lot of online comments said those people were stupid. I admired them for what they did. I'm sure it wasn't easy and the aftermath will be scary, but they did what was right in my opinion. Those people hadn't gotten a raise in TEN YEARS, not to mention the pay cuts they had taken. That's bullshit, and it irritates the fuck out of me that corporate higher ups think they can continue to screw people like that. It's like they all think we owe them something for their shitty treatment. They clearly would've lost their jobs anyway, so all the better they stood up for themselves.

Happy Thanksgiving to ya!

James said...

"it irritates the fuck out of me that corporate higher ups think they can continue to screw people like that."

I guess the good news on this one is that there is definitely a limit to how much corporate higher ups can screw over their employees.

It's been a long time since a union flexed its muscles enough to FIGHT BACK. Can't think of another example occurring in my adult life.