November 20, 2012
Twinkies, Ho Ho’s, Dingdongs and CupCakes might soon become a thing of the past due to a Baker Union strike. According to the Hostess website, “Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations”.
The Hostess factories are just one high profile example of unions wielding their power and intervening in the free market. In addition to a lack of Twinkies and Wonderbread, union strikes are causing upsets in other industries as well. Heritage’s Amy Payne explains,
A union-backed group is planning to stage protests at Wal-Mart stores on Black Friday. And unionized workers with the Service Employees International Union (SEIU) are planning a protest at Los Angeles International Airport tomorrow—one of the busiest travel days of the year.
At the core of this problem is the restrictive nature of union voting and membership. Once a union is formed, employees rarely have a choice whether to opt into the union or cast a vote for leadership. Unions remain certified indefinitely and do not have to stand for re-election causing new workers to accept the current union representation. And only 7 percent of private sector union members vote to belong to their union.
Heritage Labor expert James Sherk further explains the long term impacts of union strikes,
Companies like Hostess need to be nimble, but unions make it difficult to respond to a changing marketplace. This makes unionized firms less competitive. So unionized firms invest less, create fewer jobs, and earn less than comparable non-union firms.
While unions try to avoid bankrupting their firms, the companies grow more slowly—and shrink more rapidly—than their non-union competitors. Over time, they eventually go under. What happened to Hostess has happened across the entire economy.
This is one reason why union membership keeps falling: Unions cannot recruit enough new members to replace the ones they keep losing. In 2012, union membership hit another record low, falling 0.5 points to 11.2 percent. In the private sector, just 6.6 percent of workers belong to a union.
And the problem isn’t going away any time soon. President Obama has been a long time ally of union leaders and made a point of taking one of his first meetings after re-election with union leaders who spent heavily in the past election.
What do you think about the closure of the Hostess factory and union power?