Twinkies vs. Unions: A Struggle for Survival

There was a discussion between the union leader for Hostess workers and Greg Rayburn, CEO of Hostess, right before Rayburn and nine other executives received raises prior to bankruptcy. See "Hostess Twinkies CEO tripled salary to $2.5m while preparing to file bankruptcy." 

 

Here's a transcript of that private discussion between the Union Leader and Greg Rayburn:

 

Union Leader: "There came into Egypt a Pharaoh who did not know."
Greg RaybuNorn: I beg your pardon, is that a proverb?
Union Leader: No, a prophecy. The rich have been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn't allow unions. I know what this guy is all about, greed. He don't give a damn about Hostess or the unions. He's in and out for the buck and he don't take prisoners.

 

Actually, that's dialogue from the 1987 film Wall Street, when Carl Fox, played by Martin Sheen, hears Gordon Gekko's plan for Bluestar airlines. In this case, life imitates art. The Hostess Twinkie and Ho-Ho hostage situation is just that--holding these sugar-filled treats hostage from kids and overweight adults who don't need them in the first place.

 

Still, the Twinkie and Ho-Ho are not dead. When another company purchases Hostess and moves the assembly line and recipes overseas for the benefit of cheap labor and more profit, then we will once again see the Twinkie and Ho-Ho. Even if these jobs are not sent overseas, we'll still see the Twinkie and Ho-Ho again with even greater popularity from the current events taking place. The true death we are seeing is in the ongoing decimation of unions.

 

I'm not going to sit here and say unions are right or wrong. But when you have a choice of being overworked and underpaid in poor working conditions and having your job sent overseas--well, I guess it's good to be overworked and underpaid.

 

The NFL Players Union had to disband in favor of bringing their case to court. Perhaps we'll see unions replaced with class-action lawsuits. For teachers, well, you can't send those jobs overseas--at least not yet.  But when jobs are scarce and unions go on strike, executives can give themselves raises before filing bankruptcy. Then, as more jobs go overseas, the union goes down with the workers.

 

If the union does go by way of the Arabian Sea to India or China, then what's left for the overworked and underpaid worker trying to hang on to a job in a malfunctioning economy? To me, any lawsuit against an employer is at risk of losing a job and, therefore, a house and mortgage that turns delinquent. Hiring a lawyer--for a limited time--to go up against the corporate attorneys who will outlast the hopeless employee is a losing proposition for said employee.

 

With the demise of unions--as we have seen in this Hostess debacle--the only way the President can build up the middle class in this country is to enforce extremely rigorous taxes on companies that send jobs overseas for cheap labor and create significant incentives for companies that keep jobs in this country. It's all about greed and it needs to be profitable to run a company in the U.S. Otherwise, the unempowered, union-less worker will have fewer and fewer alternatives. Wages will only remain low unless there are enough jobs for competitive salaries. The middle-class will be pinned against a wall of mortgage, student loan and credit card debt without higher wages. And, the economy will continue a slow recession-like recovery.

 

At this point, the jobs need to be here in the U.S., not overseas, if we want a true recovery in housing, the economy and overall productivity in this country. Here's another way that Washington can make a difference and keep this country from going over a "fiscal cliff." But, will Washington recognize this angle for driving in revenue? Let's wait and see....