Taking Down Twinkies
Twinkies are selling for hundreds of dollars on eBay. Union membership has been dropping steadily over the past decade.
Sound unrelated? They aren't. The fate of the popular spongecake was in the hands of the unionized men and women who work for Hostess Brands Inc.
Or perhaps I should say “worked” – past tense. A union-backed strike has killed what the Great Depression couldn't. Hostess announced last week that it was suspending operations and would be laying off more than 18,000 employees. (News came late Monday that both sides had agreed to a mediation.)
The union in question – the Bakery, Confectionery, Tobacco Workers and Grain Millers International – doesn't deserve all the blame. Hostess has struggled financially for years, losing $341 million last year alone. It didn't have to end this way.
The company was, in fact, making cuts to stay competitive amid a tough economy and changing eating habits. These cuts, however, angered the unions that represented Hostess workers: the bakers union and the Teamsters. Their protests led to the strike that has now dealt the company its final blow.
Union leaders are blaming poor management for the company's demise, but that explanation doesn't hold up. The Teamsters examined the books and reluctantly agreed to accept the cuts. The bakers union held out in a myopic and self-defeating demand for more. Now, instead of having less, they have nothing.
This is how unions often operate in the 21st-century economy. They function like an albatross around a company's neck – making it less flexible, less able to react wisely to the demands of a changing marketplace. An inherent suspicion of management leads them to refuse to accept good-faith offers that would benefit everyone, management and labor alike. As a result, unionized companies make less, invest less and create fewer jobs than nonunion companies. The “us versus them” attitude winds up taking down the whole team.
As Heritage labor analyst James Sherk points out, this is a major reason why union membership keeps falling. Unions keep losing members as existing unionized firms shrink, and they can't recruit enough new members to take their place. This year, union membership hit another record low: 11.2 percent. In the private sector, just 6.6 percent of workers belong to unions.
Union leaders have not shown any inclination to change their destructive ways. Examples such as the way the Teamsters reacted – agreeing to necessary cuts – in the case of Hostess remain the exception. Rather than reform to adapt to the modern economy, unions instead are trying to boost membership, making it tougher for workers to avoid unionizing.
Worse, they have the full backing of the Obama administration. The president enthusiastically campaigned in favor of the “Employee Free Choice Act” – an Orwellian title for something that would replace the current system of private ballots. Workers would be forced to cast their votes about whether or not to unionize with publicly signed cards, making it easier for union leaders to harass and pressure workers who refuse to vote the “correct” way.
The National Labor Relations Board has gotten in on the act as well. “The NLRB just changed its rules to enable unions to cherry-pick who votes in union elections,” Mr. Sherk writes. “At one New York department store, unions recently formed a unit representing only women's shoe associates on the second and fifth floors. None of the 300 other employees in the store got to vote.”
Yet if that union's actions take down the entire company – as Hostess workers have now found out the hard way – who gets hurt? Everyone, members and nonmembers alike.
Workers should be allowed to unionize if they like. But it should be a free and private choice, made in a nonthreatening atmosphere. The government should not deprive workers of a secret-ballot vote because union leaders might not like the outcome.
Thousands of bakery workers are out of a job. Hundred-dollar Twinkies pop up on eBay. Unless today's unions want to see more of this kind of thing, they may want to try a new recipe.