Taking the Cake

Federal retraining follies

When bakers working for Hostess, the AFL-CIO-affiliated Bakery, Confectionary, Tobacco Workers & Grain Millers International union, decided they would not accept any further cutbacks in salary and benefits last winter, they brought the company down. Hostess filed for bankruptcy and began the liquidation process early in 2013. 

As a result, most of Hostess' employees no longer have jobs. But even though the failure of Hostess was largely self-inflicted—by both union and management decisions—the U.S. Department of Labor has determined that employees affected by the bakery's closure qualify for Trade Adjustment Assistance (TAA).

The TAA program is a government-subsidized retraining service for workers who have lost their jobs due to world trade—through outsourcing, increased imports, and the like. The program offers up to 130 weeks of training and wage subsidies, reimbursements for job search and relocation costs, and tax credits for health insurance.

There is little evidence that foreign competition and snack food imports were behind Hostess' failure. Investor's Business Daily noted that bakery imports have been flat since 2010, and that the domestic baking industry is expected to grow at a modest 2 percent rate through 2020.