Cross-posted from Real Economics.
In reporting the bankruptcy of Hostess, the unremitting hostility of conservatives to labor unions and working people is fully evident. Redstate's LaborUnionReport titled his or her article, A Eulogy: The Sad Day A Ding Dong Union Killed Twinkie The Kid. It quotes extensively from the company's statement on the company's website, then from a statement by the Teamsters Union, which had advised the Bakery, Confectionary, Tobacco and Grain Millers International Union not to strike without first trying to find alternatives. This is probably the largest quote from a labor source you will ever find on Redstate. But what is most interesting is the one paragraph in the Teamsters statement that LaborUnionReport did not include in his or her extended quote:
In fact, when Hostess attempted to throw out its collective bargainingThe problem for LaborUnionReport, of course, is that this single paragraph demolishes his or her preferred alternative reality that it is the labor unions and the greedy workers whom are solely to blame for the destruction of Hostess. The paragraph shows that the company tried to illegally renege on its contract with the Teamsters, and, furthermore, the company was rebuffed in a court of law. Rather difficult to pin the blame solely on labor unions and the workers with those kind of facts!
agreement with the Teamsters in court, the Teamsters fought back and
won, ensuring that Hostess could not unilaterally make changes to
working conditions during the several months’ long legal process that
recently ended. Teamster Hostess members were allowed to decide their
fate by voting on the final offer conducted by a secret mail ballot.
More than two-thirds of Hostess Teamsters members voted with 53 percent
voting to approve the final offer.
Continued below the fluer-de-kos...
In another article the next day, As Union Bosses Spin Twinkies’ Demise, Bakers’ Union Boss Admits Union Knew Hostess Would Die, LaborUnionReport directly attacks the statement by "AFL-CIO’s Big Daddy Rich Trumka"
The problem with Trumka’s lie-filled logic is that Wall Street didn’tWell, of course Wall Street did not call the strike. How about the verb "provoked" instead? But in the view of conservatives, the Galtian Overlords of Finance can do no wrong, so never should any fingers be pointed at them. Which makes LaborUnionReport's RedState articles that much more interesting as an example of how biased and one-sided conservatives are on these issues. Because all you have to do is follow a few of the links in LaborUnionReport's RedState article, to see that Hostess had originally been crippled by financial predators a decade ago, and the looting never stopped: in fact, workers at Hostess have already given concessions of hundreds of millions of dollars.
call the strike and Trumka fails to address the fact that without Wall
Street investors investing in Hostess, the company, with its shrinking market and overly-burdensome union contracts would have likely died years ago.
Back in July, a CNN/Fortune article provided a lot more facts, under the subheadline, "Caught in a fight between labor and hedge funds, the baker may finally have reached its expiration date."
Hostess was able to exit bankruptcy in 2009 for three reasons. The firstWhy do conservatives always leave out the facts about how much workers and unions have lost? Or how about the not unimportant fact that Hostess sales have plummeted 28% in the past eight years? Gee, could the economic destruction caused by the 2007-2008 financial crash have anything to do with that? I have two brothers who work in the wholesale food industry, and I know from them exactly how badly retail sales have been slammed by the Second Great Depression we are living through. There is not a business on the planet that can experience a 28% decline in sales and not start hemorrhaging red ink.
was Ripplewood's equity infusion of $130 million in return for control
of the company (it currently owns about two-thirds of the equity). The
second reason: substantial concessions by the two big unions. Annual
labor cost savings to the company were about $110 million; thousands of
union members lost their jobs.
On exiting the first bankruptcy, Hostess's total debt load was nearly
$670 million. That was well above what it went into bankruptcy with in
the first place -- an unusual circumstance that the company justified on
expectations of "growing" into its capital structure.
By late 2011, Hostess was getting, well, creamed. Its sales last year --
$2.5 billion -- were down about 11% from 2008 and down 28% from 2004.
(Twinkies remain the best individual seller -- 323 million of them in
the 52-week period ending June 29, give or take a splurt.) Overall,
Hostess lost $341 million in fiscal 2011, 2½ times the loss of the prior
year -- and by early 2012, primarily because of burgeoning interest
obligations, its debt had grown to about $860 million.
Or how about the fact that 35 to 40 percent of everything we buy goes to usury? Why do conservatives - especially so called "Christian" conservatives - never rail against the evils of usury? Why do they not see the debt loaded onto a company like Hostess, and immediately think of the lost tradition of biblical debt cancellations?
One of the reasons the internet is so powerful is that it can find information pathways that bypass the screen of Versailles common wisdom. In this case, someone who actually works in a Hostess bakery in Kansas is able to get this information out on DailyKos:
In 2005 it was another contract year and this time there was no way out of concessions. The Union negotiated a deal that would save the
company $150 million a year in labor. It was a tough internal battle to
get people to vote for it. We turned it down twice. Finally the Union
told us it was in our best interest and something had to give. So many
of us, including myself, changed our votes and took the offer. Remember
that next time you see CEO Rayburn on tv stating that we haven't
sacrificed for this company. The company then emerged from bankruptcy.
In 2005 before concessions I made $48,000, last year I made $34,000. My
pay changed dramatically but at least I was still contributing to my
In July of 2011 we received a letter from the company. It said that
the $3+ per hour that we as a Union contribute to the pension was going
to be 'borrowed' by the company until they could be profitable again....
This money will never be paid back. The company filed for bankruptcy and
the judge ruled that the $3+ per hour was a debt the company couldn't
repay. The Union continued to work despite this theft of our self-funded
pension contributions for over a year....
What was this last/best/final offer? You'd never know by watching the main stream media tell the story. So here you go:
1) 8% hourly pay cut in year 1 with additional cuts totaling 27% over 5
years. Currently, I make $16.12 an hour at TOP rate of pay in the
bakery. I would drop to $11.26 in 5 years.
2) They get to keep our $3+ an hour forever.
3) Doubling of weekly insurance premium.
4) Lowering of overall quality of insurance plan.
5) TOTAL withdrawal from ALL pensions. If you don't have it now then you never will.
....Remember how I said I made $48,000 in 2005 and $34,000 last year? I would make $25,000 in 5 years if I took their offer.
I really wish that someone in the "mainstream media" at some point would ask someone like RedState founder Erik Erickson why the only parasites conservatives can ever locate are labor unions and greedy workers. And, exactly what level of wages conservatives think American workers should settle for. An embarrassingly easy Google search reveals that a route salesman for Hostess earns an average of $41,200 a year. If conservatives think this is too much money to give a lowly factory worker or truck driver, will someone in the "mainstream media" please, PLEASE ask someone like Erickson if $30,000 is low enough. Or $25,000. Or $18,751, which is what a Walmart sales associate earns in a year.
Do conservatives really believe their fellow Americans should be content to live and raise a family on $18,751 a year? Damnit, will someone in the "mainstream media"please ask Erickson, or Alan Simpson, or Peter Peterson, if they are willing to work for that small amount of money themselves. Ask Rush Limbaugh to take a pay cut to $18,751 a year and see what he says! The radio station conglomerates that air Limbaugh's effluent have fallen on hard times since the Big Gasbag's attack on Sandra Fluke back in March. As Richard Myers reported on DailyKos, Dial Global has taken such a huge financial hit, that the company last week voluntarily de-listied from NASDAQ after Dial Global's stock dropped by nearly 77 percent. Dial Global identified three causes for its troubles, including "advertisers' response to controversial statements by a certain nationally syndicated talk radio personality in MARCH 2012." Here's the perfact opportunity for Limbaugh to practice what he preaches, and give his own painful concessions to his corporate overlords.
And if Erickson or whoever conservative windbag hasn't already run away after those questions, ask them just where they think the consumers in our consumer economy get the money to pay for their consuming. Do they really think the way to boost the consumer economy is to cut workers' wages? Exactly who do conservatives think consumers are, anyway? Rich people only? (That would at least explain why conservatives are fixated on the idea - now discredited three times, in 1921, 1981, and 2002 - of giving tax cuts to rich people.
Really, why do conservatives never include the facts about worker earnings when they talk or write about these matters? During the late campaign, Mitt Romney and Republicans repeatedly argued that average Americans have been buried economically the past four years (turning a phrase by Vice-President Biden back against the Administration). But it's not been just the past four years, and it's certainly not been just the policies of the Obama administration. Was it really just Obama policies that blew away 28% of Hostess' sales? When will conservatives and Republicans come out and openly tell us just what level of earnings they think the average American worker should receive?