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FLUFF FILLING: The U.S. Department of Labor has been short on specifics regarding its claim that Hostess went out of business because of foreign trade.
By Travis Perry │ Kansas Watchdog
OSAWATOMIE — It’s been four months since the iconic Twinkie began disappearing from store shelves nationwide. While some have speculated the golden sponge cake could survive the apocalypse itself, its undoing was something else entirely: unreasonable demands from an uncompromising labor union.
Apparently the federal government didn’t get the memo.
Officials at the U.S. Department of Labor claim it wasn’t the decision of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union to go on strike that finally brought about the Twinkie’s demise, but rather the increased import and sale of products from Hostess’ foreign competitors.
Wait, what?
As a result of the DOL’s unique interpretation, more than 18,000 former Hostess employees are eligible for thousands of dollars in extra assistance above and beyond standard unemployment insurance, funded through the department’s Trade Adjustment Assistance (TAA) program — and your tax dollars.
We’ll forgive you if you’re confused, so were we. And so was Dan Lara, public information officer for the Kansas Department of Commerce, who said the federal decision was “kind of strange.”
Even former Hostess executives say otherwise. Shortly after filing for bankruptcy in January 2012, Hostess stated that its inability to compete was “primarily due to legacy pension and medical benefit obligations and restrictive work rules,” not foreign trade.
Still, the DOL is sticking to its guns and defending its decision to help retrain, re-employ or relocate the displaced workers. But despite the determination, the federal agency has been vague on exactly why it believes Hostess was overpowered by global competition.
TAA certifying officer Elliott Kushner detailed the agency’s position in an official opinion released in February. The report is chock-full of government legal-ese but skimps on specifics, stating that “increased imports contributed importantly” toward Hostess’ closure.
When pressed for more detail, Kushner punted, deferring to the DOL’s department of public relations, which regurgitated the same talking points. An agency spokesperson said the opinion was reached based largely on confidential business data requests, as well as customer surveys and aggregate data from the International Trade Commission.
Drilling deeper, things don’t get much better. The DOL can’t say exactly how much each worker will receive, though according to a breakdown of TAA benefits it could be in excess of $10,000, depending on a number of factors.
If half the former Hostess employees take advantage of benefits at that level, the taxpayer bill could possibly hit $90 million.
It’s difficult to accurately judge the DOL’s actions when they won’t release the data driving the decision. But while Kushner may have seen the globalization boogeyman in the information he reviewed, it wasn’t reflected in data compiled by the DOL’s Bureau of Labor Statistics.
Since 2007, the commercial bakery industry as a whole has seen a steady increase in the weekly wages of employees, which has equated to a nearly $2,000 bump in annual compensation. Additionally, total industry employment hit a six-year high in October 2012, just before Hostess went under, peaking at nearly 149,000 workers nationwide.
Contact Travis Perry at travis@kansaswatchdog.org, or follow him on Twitter at @muckraker62.
