Hostess cupcake and… the living wage

By Robert Holst

Today at work one of my co-workers was eating a Hostess cupcake. A normal everyday event by all accounts nothing special. But in this case my co-worker as well as I are union members. What do these two things have to do with each other you might ask? I can’t blame you for asking because most people are probably not aware of what happened at Hostess and their employees that belonged to unions.

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Two unions represented workers at Hostess. The Teamsters and The Bakery, Confectionery, Tobacco and Grain Millers Union. The BCTGM told CNBC that 98 percent of their contracts are negotiated without incident. So what went wrong here? Daniel Opler, a history professor at College of Mount Saint Vincent and a labor relations specialist sees it this way “There’s no question the bakers union that rejected a settlement made a tactical error here,” he said. “But Hostess kept asking for concessions in exchange to keep the plants open, and either workers gave away all their power to control wages or the plants closed,” Opler said. “It was a no-win situation.

I’m not sure this was a case of the union overplaying its hand or not having a hand to play.”[1] The company had gone to workers twice before after filing bankruptcy looking for concessions the union agreed. The company was back for a third round of concessions. They were looking for workers to give up any power they had left in fighting for wages and benefits. The workers knew that due to mismanagement they were only slowing down the inevitable demise of their jobs. So the company folded. The corporate media was quick to blame unions.

They tried to play up the friction between workers from the two unions that had been split about accepting yet another round of concessions. But they shied away from the story that the company had been poorly managed for a long time. Workers lost pensions and other monies owed to them in the bankruptcy and the hostess executives walked away with the bonuses from the money left over in order to retain their talent through the bankruptcy. While the company was trying to cut pay by 8 percent and benefits by 32 percent the CEO gave himself a 300% raise (750,000 to 2,550,000).

9 Executives received 60% to over 100% raises. So basically the workers got stiffed and the executives walked away with golden parachutes. The company went on to reopen with the same name but was now being run by a Wall Street investment firm. Smaller companies had attempted to buy the name but the endless supply of money on Wall Street beat everybody else out and now a bunch of investors who know nothing about baking so much as a cookie are now in the baked goody business. As you can imagine the main concern is profits. Not product. The baked goods are now smaller and cost more and the workers are non-union. No money to pay union people good wages and benefits but plenty of money for golden parachutes. The new man in charge is C. Dean Metropoulos who says Unions are not coming back. Oh he is worth 1.3 billion.

living-wage 1234   So knowing all this I watched my co-worker as he unwrapped the chocolaty and crème filled goodness and proceeded to stick it in his word hole. I could feel the anger building but decided to use a little diplomatic skill and opened the conversation with a question figuring he may not know what happened. I asked “Would you say that you are a supporter of organized labor?”  His answer shocked me as I was expecting a different one. He said, “That is hard to say.” Now this is a man who is vested in one of the few private sector defined benefit pensions. He has full medical and dental even when unemployed. He has annuities and all sorts of plans and protections in the workplace. He continued, “I would say I support it as much as it supports me.” (I call that the organized labor death spiral but more on that later.) So I continued and explained my point in relation to Hostess and what happened to the workers there and he said, “He didn’t know that” and appreciated me telling him. Then went on to say that him “not buying it wouldn’t make a difference and how would he explain to his wife and kids they cant buy these goodies anymore. “

So here is a union member. That only has the standard of living he has because of organized labor thinking supporting labor isn’t worth the effort. He may have personal reasons like being out of work or not getting an assignment he wanted but I decided not to ask. I told him you don’t support the union because it doesn’t support you and the union cant support you because you don’t support the union. (Remember the death spiral?) So here we were at a standoff and not able to make each other understand.

The Hostess boycott in the Holst household is still going strong since the employees were laid off and stripped of their pensions. I doubt it is affecting the bottom line of the New Hostess LLC. But I like to think it is. In a world where my power as a working class person to defend myself is being stripped away little by little everyday it is all I can do.

For Organized Labor to get itself straightened out it is going to have to start with the laborers. We have to support each other in our battles for a higher standard of living. In 1937 UAW organizers were beaten in an event called The Battle of the Overpass for handing out leaflets during a shift change at a Ford plant. Ford’s security forces beat the men and even women for trying to pass information about the UAW to employees. If they could be beaten and yet come back to organize Ford 3 years later couldn’t we today forgo a few cupcakes?

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[1] http://www.cnbc.com/id/100678728

 

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