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How Vulture Capitalists Killed the Twinkie

The demise of Hostess is a story of management that boosted its own salaries, while failing to make agreed payments into workers’ pension funds.

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But as we’ve seen, it wasn’t the unions who were inflexible or unwilling to make sacrifices for the good of the company. “In effect, the union, should they give more concessions, is becoming a major investor without representation,” says Shaiken. “Unless they get seats on the board or some other form of input.” (The most recent deal included a minority stake in the company; it remains to be seen if the company is willing to offer greater control to the workers in exchange for more givebacks.)

Pegging a horrendously managed company’s fate to labor’s larger troubles provides an exceedingly limited understanding of the wider context. The Hostess debacle is only half the story of labor’s decline: Manufacturing companies that are still organized from the glory days of the mid-20th century are seen as representative of the union movement because current American labor law makes it almost impossible to organize workers in, say, the growing service sector. Unionization rates are falling because unorganized companies can bring disproportionate, and often illegal, force to bear with few repercussions.

In a healthier and more just labor system, the Hostess crisis would be seen as the decline of a moribund and dreadfully mismanaged company, not a symptom of organized labor’s malaise.

 

Jake Blumgart is a freelance reporter and editor based in Philadelphia. Follow him on Twitter at @jblumgart.

 
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