The Hostess / Bakers Standoff — Part 3


Posted by Bob Lord

The AzBlueMeanie and I both have posted on the Hostess bakery situation. I posted on the implications for organized labor, and us, here. The AzBlueMeanie focused on the role that private equity funds had in Hostess' failure here.

Well, it looks like the story is not entirely written. The judge has ordered Hostess and the Bakers union to Let's hope the Bakers union holds its ground. I'm not above gloating when I've called something correctly, but in this case I'm a bit sickened to have done so. In my prior post, after discussing the situations at Hostess and Walmart, I stated:

I had to dig a little, but I was able to find that Hostess was demanding the workers take cuts in pay and benefits of up to 32%. Given that the company already has been through one recent reorganization, the workers undoubtedly were not paid well prior to the 32% cut. So where would they have been if they accepted the cut? Minimum wage? … If unions are allowed to die, it won't be long before all workers will lead the lives that Walmart workers lead now.

After finishing my post, I stumbled onto a diary at Daily Kos specifying the exact terms managment tried to ram down the throats of the Bakers union. Over a five-year period, the Bakers union members would have their hourly pay reduced to a top rate of $11.26 (less for more junior workers), with few benefits and no pension. For all intents and purposes, that's minimum wage. It may be a buck an hour more than a Walmart worker with a few years' experience would make, but the difference is miniscule.

So, if the Bakers cave, organized workers will have been reduced to the level of Walmart workers and their union will have been entirely emasculated. If that happens, the story will repeat itself until nothing is left of unions.