The Agitator #51
by Oliver_Halle
 The Agitator
November 29, 2012 11:04 AM | 1971 views | 6 6 comments | 19 19 recommendations | email to a friend | print | permalink

The demise of Hostess bakery has at least two segments of the American public unhappy: those who will miss the product and those who blame the unionized workers and consider them the cause of this eighty year old company’s ending to be their fault. Just maybe the explanations are a little more complicated and a little more nuanced.

Union bashing has taken on a new meaning since the recession, particularly public sector ones. But union membership is at an all-time low, probably down forty percent from its heydays. Public sector unions may comprise the largest segment of members today. They are really catching it, but overlooked is that many states and municipalities that signed agreements never kept their end of the bargain by paying into the pension funds as promised. I think it fair to ask why unions came to be, and the answer isn’t complicated. Employers created working conditions that were intolerable. Unions not only sought better pay, but they also sought collective bargaining to improve safety, reduce the number of hours, and to protect workers against what we call unfair labor practices. In time the unions acquired power and with it came abuses that we are all too familiar with. In other words, the power and abuses shifted from the employer to the union. That pendulum has in recent years has swung back again. Today on reactionary radio you hear the talk meisters say that workers should be grateful just to have a job, that they should shut up and take whatever comes their way from their employer, that life is tough, and that everyone has to bear the burden. One of these charlatans once made the mistake of disclosing that he is a member of the Screen Actors Guild (have any readers bought a full price Broadway play ticket over the years?), yet here he was blaming the unions for Hostess going under. While these worker bashers tout sacrifice, you can bet that the likes of Rush Limbaugh haven’t given up anything ($40 million/year for His Porkulous) while trashing the working stiffs.

Back to Hostess. A few years ago Hostess went through Chapter 11 reorganization. The unions agreed to pay and benefit cuts in order for the company to survive. Then Hostess was purchased by some private equity investors and new management put in place---none with food service experience but instead, financial engineers. And what was one of the first things the new team did? They doubled their pay and took seven figure incomes. I remember that in officer training we were taught that an officer never eats until the last enlisted man has eaten, and he never sleeps until the last enlisted man has a place to sleep. That is leadership 101. But the Hostess management team went the other direction. While their company was failing they demanded that the workers take cuts while they took more out for themselves. And from what I have read, the management did nothing to try and offset the changes in American eating habits, which was shifting to healthier food products. The big boys made no effort to enter the export market in a meaningful way, something they could have done considering that the product has preservatives that would not have impeded shipping, and they made no effort to produce goods that the public wanted. No, it was too easy to clean the company out at the top and tell the bakers, drivers, and other workers to eat the crumbs that they were only too lucky to get. They overlooked the simple fact that owners and workers have a symbiotic relationship, and setting the example at the top, talking and working with your people, taking care of those that do the daily routines, can produce amazing results. Delta is an example. There are many other unsung American companies that understand good management and good leadership, that they are all in it together, and that happy workers are productive workers.

The income disparity between the C - level managers and employees has grown from roughly 40:1 in the early 1980s to 300:1 today. If anyone thinks that this is healthy, that it is making America better, so be it. I couldn’t disagree more. We grew the largest middle class in history during and after WW II. This substantially contributed to the economy and benefited everyone. Middle class people could afford to send their kids to college, to buy homes, to own two cars, and contribute to the economic growth of our great country. Upward mobility jobs with rewarding careers were the American way of life if you were willing to work for it. With less disposable income today for the middle, there is less money being spent, and our consumer economy is hurting badly. It will get worse if better heads don’t prevail and figure out that we are all in this together, that we don’t ever want to become a nation of haves and have nots, that companies like Hostess could have survived, that Hostess is just a microcosm of a very bad trend.

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Frank Ward
December 05, 2012
Unions are still necessary for working people to help deal with the power of employers especially in wage negotiations. Conservatives say people can just quit if they are unhappy with their wages but that is simply not a reasonable alternative for many people because of the job market and of course if someone is carrying a pre-existing medical condition which would keep them from qualifying for new coverage or has an existing condition which meeds to keep being treated. Conservatives hate all unions ...not just he public sector ones....which is incredible to me because union members, for the most part, are people in the middle class economic level...people like us who are simply trying to either better their income or working conditions as we all would like to be able to do but who lack any leverage to ask for on their own. As for the goverment agencies which CobbCountyGuy refers to for employees to take their complaints, they take awhile to act for the most part and the employee has to deal with the whistleblower situation they create if they complain. Whistleblowers have been treated with scorn since time eternal by not only their bosses but also their peers. For the most part the American public seems unconcerned about the troubles and payscale of the American worker (unless it's them) because they want the lower prices created by the use of foreign workers. The American public wants the worker to take their low wages and just shut up and be happy with their low scale job.....especially the conservative part of the American public. So the worker gets little public support and unions are the only way they have to try to better their economic condition. The American middle class was never more economically well off than when unions were a lot stronger and the top execs were not taking so much cream off the top and the taxes for the top economic classes was higher than it is now. A strong middle class is the ticket for American prosperity. The rich will always be able to take care of theirselves regardless of what is going on. One more thing: I believe that KF referred to people inheriting riches from their families. I have seen that a lot in my line of work and yet many of those people complain the loudest about people receiving government help when they are down and about unions. It's truly amazing.
Oliver G. Halle
December 04, 2012
CobbCoGuy, you raise some topical points. First, I think that the issue of public sector unions and funding the campaigns of their presumed benefactors are different discussions. To me the single most important issue is the need for campaign finance reform. Reforming the tax code would be number two, but these are discussions for another day.

I don't believe that the creation of wealth is a zero-sum game. While I can't cite a source at the moment, I have read that in fact there are fewer people who have more of the nation's wealth than in the past and that the trend continues. Yes, more people own toys today that could only have been enjoyed by the rich at one time, but that is the result of increased productivity, which lowers costs as more goods and services are produced at affordable prices.

My point was that too many employers are skimming much more for themselves and the shareholders. As the disparity between what the top takes versus what employees are paid, there are fewer dollars being spent. The rich invest their money, not all of it in the U.S., whereas almost every dime a worker earns goes back into the economy. Henry Ford ensured that his workers could afford his product. He understood that happy workers, workers who are paid a living wage, are productive workers, and productive workers make the economy better. Steve Jobs wealth didn't hurt anyone. It is the growing disparity of income and wealth that hurts on a macro level.
December 04, 2012
Income inequality is an interesting topic.

In your final paragraph, Mr. Halle, you are intimating, I believe, that income inequality is the leading to the demise of the middle class and is causing damage to our economy.

If I'm correct, then you believe that the creation of wealth is a zero-sum game. That is, if you're rich, then I'm poor. Since your piece of the pie is larger, mine is necessarily smaller.

In this regard, Mr. Foley is citing a popular Democrat talking point about income inequality. Correct me if I'm wrong, Mr. Foley, but the sources are studies by economists Emmanuel Saez of the University of California and Thomas Piketty of the Paris School of Economics.

What is interesting is that another study by Saez shows that WEALTH inequality (not income, but wealth) has decreased. This is a more meaningful metric since wealth is the total accumulation of stuff, as opposed to income, which is the accumulation of stuff over a defined time period.

Any yet another metric is consumption inequality - which also has decreased over time. For example, there was a time when only the rich could afford automobiles. There was a time when only the rich could afford color TVs. Look at what most of us in the U.S. enjoy now.

Henry Ford got rich; and we now have affordable automobiles. Steve Jobs got rich; and we now have iPhones.

So, l have a question for the readers. How were you harmed by Steve Job's prosperity?

The creation of wealth is not a zero-sum game. When wealth is created in the form of goods and services, we all benefit.
December 04, 2012
In the beginning, unions served a purpose; however, with the rise of government, the primary role of unions - worker advocacy - has diminished.

Got safety problems? File a complaint with OSHA. Not getting your overtime pay? Contact the good people at the US Department of Labor's Wage and Hour Division. Discrimination? EEOC is your friend.

The primary beef that conservatives have with unions is the unholy alliance between PUBLIC SECTOR unions and the politicians whose campaigns they help fund, with dues extracted from members, in return for generous (not market based) compensation and benefit packages.
Samual Gompers
December 01, 2012
Foley, far left blogger and liberal PR shill, shows his hypocrisy here. He's pro union simply by support of Obama, however the unions must've done him wrong in his business or his writing for him to make this comment.

So which is it Foley? You are pro union as long as they don't keep YOU from making a living, right? My god, here you admit it: middle class incomes have gone down and/or flattened under Obama...actually, incomes are down 43 percent under Obama, but YOU blame others...not the leader of the country but those who must pay most of the taxes in the country. Your logic is twisted and selfish.

Kevin Foley
November 29, 2012
Oliver, unions are boogiemen created by the far right entertainment complex (FREC) on behalf of the wealthiest 1% whose income has gone up over the last five years while middle class incomes have gone down or flattened.

It's easy to fool people when all you do is affirm their own feaers and prejudices.
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