- The Foundry: Conservative Policy News Blog from The Heritage Foundation - http://blog.heritage.org -
Union That Bankrupted Hostess to Receive Generous Government Subsidies
Posted By Ashe Schow On February 21, 2013 @ 5:30 pm In Featured | Comments Disabled
The union whose strike led to the bankruptcy of Hostess last year has just been awarded government benefits  from a program few qualify for.
Last year, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union refused to accept concessions  that would have kept Hostess in business. The company had tried to cut costs as it faced high labor expenses , rising ingredient costs, and decreasing sales. The Teamsters union accepted the concessions, but the Bakery union would not, choosing to strike. Unable to continue operating, Hostess filed for bankruptcy.
Now those who helped bring down an American icon will receive generous, taxpayer-funded benefits from the Trade Adjustment Assistance (TAA) program. These generous benefits  come in addition to existing unemployment insurance, job placement, and job training programs. TAA benefits include:
Small wonder David Durkee, president of the Bakery union, does not think  his newly unemployed members’ “income situation is any different than it would have been if they were [still] working for the company.”
But why are Hostess employees getting extra benefits intended for workers who lost their jobs due to trade?
The Department of Labor claims that “increased imports of baked products contributed importantly to the company’s sales declines and worker separations.” That is quite a stretch. The Atkins diet surely did more damage to the company than trade did. Even if imports contributed to Hostess’s downfall, there is no escaping the fact that the company tried to adjust but the union rejected its efforts. The job losses had little to do with foreign trade.
Nonetheless, the Administration is providing trade-related benefits to employees who put themselves out of work.
As Heritage’s David Muhlhausen and James Sherk write :
Under TAA, the government taxes all Americans to provide especially generous benefits to a selected few.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2013/02/21/union-that-bankrupted-hostess-to-receive-generous-government-subsidies/
URLs in this post:
 Image: http://blog.heritage.org/wp-content/uploads/twinkies-2.jpg
 awarded government benefits: http://www.dol.gov/opa/media/press/eta/ETA20130292.htm
 refused to accept concessions: http://blog.heritage.org/2012/11/16/no-more-twinkies-unions-to-blame/
 high labor expenses: http://blog.heritage.org/2012/01/10/twinkies-kodak-bailouts-and-the-free-market/
 generous benefits: http://www.heritage.org/research/reports/2011/05/trade-adjustment-assistance-dont-link-the-costly-and-ineffective-program-to-free-trade-agreements
 does not think: http://blogs.wsj.com/bankruptcy/2013/02/08/union-still-sees-a-future-for-itself-in-liquidating-hostess/
Copyright © 2011 The Heritage Foundation. All rights reserved.