When Hostess Brands, Inc. shut its doors in November 2012, over 18,000 workers were laid off in 48 states across the country. Yesterday the Department of Labor announced that these former employees are now eligible to apply for Trade Adjustment Assistance.
Trade Adjustment Assistance was created by the Trade Expansion Act of 1962 under President John F. Kennedy to provide a buffer for workers adversely affected by America’s embracing of free trade. The policy shifts some of the burden of the country’s trade policy from the backs of workers to the federal government.
The announcement comes after a Labor Department investigation which determined that increased imports of baked products from other countries played a large role in the decline of Hostess’ sales. In short, the Hostess closure is one of the latest casualties of free trade.
Workers who qualify will receive re-employment services such as training in new occupational skills and trade readjusment allowances that provide income support for workers enrolled in training. Workers may also benefit from the Health Coverage Tax Credit.
Workers age 50 or older may instead opt to receive Re-employment Trade Adjustment Assistance. If these workers get a new job paying both less than $50,000 and less than the wages earned at their prior job, the RTAA program will cover 50 percent of the difference between the old wage and the new wage up to $10,000 over a two-year period. RTAA participants remain eligible for retraining and the HCTC.
The Hostess buildings closed included 33 bakeries and 565 distribution centers. The wind down also includes the closure of around 5,500 delivery routes and 570 bakery outlet stores. The process remains underway, with Hostess’ employee headcount decreasing by over 90% in the first four months and reaching conclusion in a year.