Gov’t Subsidizing Union Employees of Hostess Foods Even Though Their Own Union Led to Job Loss

-By Warner Todd Huston

You’ll recall the story, it was everywhere, after all. Hostess Foods was closed, Twinkies and Ho Hos were killed, and thousands of union workers lost their jobs. Now the federal government is doling out extra cash–your tax money–to Hostess employees. The free cash is disguised as “trade adjustment assistance.”

The U.S. Department of Labor has designated more than 18,000 former Hostess employees as eligible for “Trade Adjustment Assistance.” This is really little else but a union payoff with our tax dollars but the move is being justified by the fact that not long ago companies that make candy and other sweets (as Hostess was with its snack cakes) were hit heavily by huge hikes in sugar prices.

These prices got hiked because of Obama’s tariffs placed on sugar as a sop to the sugar unions. The high tariffs may have helped the sugar importers and their workers, but the tariffs also killed the confectionary industry.

So, many companies moved their manufacturing plants to Mexico or other countries where operating costs were cheaper in order to save on sugar costs. Hostess chose to try and keep jobs in the U.S. but to cut costs by trying to get the unions to help them save jobs by cutting back on pay and benefits.

As we know, the unions would rather have seen Hostess go bankrupt and all their jobs lost completely than withstand any cutbacks. And that is exactly what happened.

So, essentially the unions would not work with the company to save American jobs in an industry where other companies just fled the country and fired Americans. In the case of Hostess, the job loss was essentially the fault of the unions directly and Obama’s high tariffs indirectly.

And now, riding in on his white horse, is the union-bought Obama and his Department of Labor to give these greedy union members free tax dollars for having destroyed Hostess.

Not surprisingly, as business blogger Tom Blummer notes, the media has pretty much ignored this story.