Everybody enjoys the occasional Twinkie, Ding Dong, or Ho Ho. I mean, it’s practically un-American to not indulge in these sweet bakery goods.
And that’s exactly what Hostess’ mission was: to help people stuff their faces with a nice treat. But what they didn’t tell us is that they were also stuffing their executive’s bank accounts with more money as well.
In April, Hostess was accused of raising executives salaries as much as 300%. In outrage, many union workers began going on strike, forcing a handful of plants across the country to shut down. At this time, Hostess had already filed for bankruptcy and was expecting a very rocky year in 2012. What many people don’t realize is that the 300% increase in salary isn’t true. Those numbers are actually around 75%-80% increases, which are still large amounts of money nonetheless. Furthermore, Hostess CEO
Gregory Rayburn even announced that they would begin to cut workers wages and benefits. This only added more problems to an already hopeless situation creating conflicts between the unions and the company, which ultimately led to the downfall of one of the nation’s largest bakery producers. So are the unions really to blame here? Let’s look at history.
Unions were established during post-Civil War era. As industrialization was rising in America, many people were moving here from overseas for a better life. Huge industries such as Carnegie Steel and Rockefeller Oil Co. were in need of labor and were offering jobs to virtually anybody. These jobs however were some of the worst imaginable. Workers were working 12 to 16 hours per day receiving as little in pay as possible in the worst conditions. Labor unions were formed as workers demand better wages, benefits, conditions, and hours. The unions assured the workers that they were receiving benefits and working reasonable hours. If a company or factory was treating workers poorly, the unions would go on strike, refusing to do any more work until a compromise was met. As the years went by, union jobs accounted for better products and services and helped America grow prosperous in the early and mid-20th century. Even today there are thousands of different unions that are organized for the same
purposes as they when they first started.
Often times, union workers go on strike and a company is set back until they can change what the workers are demanding in order to start up again. But in the case of Hostess, a compromise couldn’t be met in time and the company was forced to close down and sell itself. Nearly 18,000 people were put out of employment because of this. Here we can see the negatives of Labor Unions.

   In many jobs, not every single employee or worker is part of a union. Because contracts prevent union workers from receiving pay cuts or being laid off, companies will target non-union workers first as to not start conflicts with the unions. Also high compensation can occur during times where the economy is flourishing. The unions can demand higher wages for their workers, which is reasonable due to the revenue increase. However, if something changes in the economy, the unions will not likely agree to reducing these wages for the union workers and the company’s equilibrium within the market will be thrown off causing them to not be able to compete with other companies.

   Unions are even hurting themselves. In a time where our economy is struggling to say the least, unions are still placing very high wages on their workers. This can ultimately lead to loss of jobs to non-unionized companies or even force companies to move to foreign countries.
Just like all things in this world, unions come with benefits and crutches. Where in some areas they benefit workers and companies, in other areas they hurt them or even run them down. The fact of the matter is, compromises must be met between companies and unions more readily so workers can still receive their wages and benefits, but not to where companies are being forced to shut down or worse, move out of America.