Union That Helped Bring Down Hostess Gets to Snack on Federal Funds

Striking employees now get to chow down on retraining money


Now with creamy new pork filling. Mmmm!

When Hostess filed for bankruptcy last year, several problems were to blame, but the bakers union refusing to accept a new contract and striking was the straw that broke the Twinkie manufacturer's back. They refused to return to work even after the company warned them it would have to shut down. The Teamsters even begged them to take the deal (though the bakers union has noted that the Teamsters were getting a better deal than they were).

Now that Hostess has shut down, those self-same union strikers are now benefitting from government program designed to help those who have lost their jobs due to "global trade." Investor's Business Daily analyzes:

[T]he Labor Department decided to shower Hostess workers with Trade Adjustment Assistance, a multibillion-dollar pork barrel program that was beefed up as a bone to Democrats, who were blocking passage of three free-trade treaties in Congress in 2012.

TAA is a lavish program doled out by the Labor Department for laid-off workers who've lost their jobs due to "global trade."

It provides worker retraining due to the supposed evils of free trade — plus moving expenses, baby-sitting expenses and as much as two years of unemployment pay. If a worker ends up making less than his union salary afterward, Uncle Sam spots the worker for 50% of the supposed lost wages in a "free" subsidy.

Investor's Business Daily goes on to note that global trade is not one of the reasons for Hostess' problems. Import of baked goods is not increasing, while the domestic baking industry is growing, albeit slowly. But those salaries and pensions by Hostess employees are worth a look:

In Hostess' case, labor costs were almost certainly a factor. The Labor Department says the average wage for bakers nationally is $11 an hour.

The unionized Hostess bakers were pulling in as much as twice that amount, which, together with pensions, was what made the company uncompetitive.

Acting Secretary of Labor Seth Harris has joined every other federal department in warning of the deep, terrible – apocalyptic, even – cuts sequestration may bring. While Harris warns about cuts to staff at job and training centers for the unemployed and slower processing of unemployment claims, he makes no mention of cuts to this TAA program. He also remarkably claims that every dollar in unemployment benefits generates $2 in economic activity, so obviously we can fix all our economic problems and become rich by laying everybody off. It won't be safe to work anyway, because the Occupational Safety and Health Administration (OSHA) will have to do fewer inspections "in the most dangerous workplaces."