USPS Loss, Hostess Bankruptcy Due To Greedy Unions?

Commentary | The end of Twinkies and the news of a USPS loss of $15.9 billion in their most recent fiscal year has led to a predictable anti-union backlash on social media, but widespread reaction to the stories this week reveals more about the state of workers’ rights and a stunning inability to see beyond the role of “greedy unions” in our current state of affairs.

The Hostess strike and USPS loss may seem to be, at first, unrelated tales of union excess, two examples in the same day of spoiled workers forcing the hand of otherwise potentially profitable outfits to fail. But the stories are being held up, unsurprisingly, as a pool of data to discredit unions, when backstory to the incidents paints a far different picture.

News outlets were afire this week reporting that the USPS loss hit nearly $16 billion in the fiscal year ending on September 30. Inevitable comparisons to Obamacare were made by the punditocracy, suggesting that government-linked agencies are fiscally irresponsible and making comments such as this one seen on Twitter:

“The USPS lost $15.9B last year. Amtrak lost $345M. I’m sure once the government starts running healthcare everything will go great!”

Or this one seen on Fark:

Postal Service reports $15.9 billion annual loss – this brought to you by the same people that will be running your health care

(Similar versions abound on social media, often tying in the widely-debunked Sandy-related slander that non-union crews were blocked from assisting in recovery efforts. They were not.)

But what many fail to realize is that the USPS is in large part facing these financial difficulties due to an unreasonable demand that pensions be funded 75 years in advance, a rapid-impact effect of the Postal Accountability and Enhancement Act of 2006 — which many have called a “poison pill” planted to deliberately bankrupt and destroy the USPS and in turn, divest it of its unionized employees.

Without the requirement — one that exists for no other agency, governmental or private — the USPS would actually be in the black, Ralph Nader has suggested:

“By June 2011, the USPS saw a total net deficit of $19.5 billion, $12.7 billion of which was borrowed money from Treasury (leaving just $2.3 billion left until the USPS hits its statutory borrowing limit of $15 billion). This $19.5 billion deficit almost exactly matches the $20.95 billion the USPS made in prepayments to the fund for future retiree health care benefits by June 2011. If the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion.”

But it’s not always behind-the-scenes machinations that spark anti-union grumbling, and the USPS loss situation is just one example being framed in an anti-union way in most media coverage. The Hostess strike and fear of the end of Twinkies is another in which Americans rushed to blame unions, when Hostess had already filed for bankruptcy back in January.

In a May letter to employees, the head of the union blamed for the end of Twinkies had this to say about the poor, insolvent company being allegedly bankrupted by greedy workers:

“In all pre-bankruptcy and post bankruptcy discussions, the company representative repeatedly stated that the financial investors of Hostess, the management and the union and non-union workers would have to make shared sacrifices (concessions) if Hostess were to have a chance of coming out of bankruptcy. However, such statements were disingenuous.”

Frank Hurt continued:

“The BCTGM was informed (via the Unsecured Creditor Committee) that the Hostess CEO was awarded a 300% raise (from approximately $750,000 to $2,550,000) prior to the January 11, 2012 bankruptcy filing. Additionally, at least nine additional top executives also received incredible raises ranging from 35% to 80%. For example, one such executive received a pay increase from $500,000 to $900,000. The chief negotiator for Hostess received a pay increase from $375,000 to $656,256.”

These compelling factoids seem to have been washed away when the public narrative regarding the end of Twinkies is repeated. In it, we hear that workers seeking a single-digit raise cheated themselves out of 100% of wages. That these poor executives receiving three-digit percent raises were forced, forced by demanding employees to shut their doors and cash in their chips rather than honor their commitments to their workers.

The facts in both scenarios — the Hostess strike and the USPS loss — are not even very difficult to uncover. Earlier this week, the mayor of St. Louis, Francis Slay, commented on the threats made by Hostess to punish workers:

“I was told months ago they were planning on closing the site in St. Louis … And there was no indication at that time it had anything to do with the strike the workers were waging.”

As the debate rages on, there is a surprisingly low level of attention given the disparity in reporting that seems all too keen to favor capital’s sob story over the union plight. But AFL-CIO President Richard Trumka released a brief and unambiguous statement on the matter today, lamenting that blaming unions as Wall Street skips away with the fruits of American blood, sweat and tears is par for the course in today’s political climate:

“What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price. These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.”

Indeed, if America needs anything right now, it is the security in and reliance on good, fair union contracts and wages. But as the American workforce becomes ever more fearful of corporate and anti-union sanction, it seems all too willing to accept the prolific propaganda circulating to further restrict the rights of workers in this great, union-built country.

Lest we forget, these basic rights we have enjoyed up until the Bain Capitalization of America were not handed to us. Men died striking for fair conditions. Children labored double-shifts in dangerous environments and sick days, pensions and workplace safety were hard-fought concessions we’ve been all too willing to give up to fund skyrocketing CEO pay packets.

So before you send that tweet jeering at the Hostess workers who have been played and pilloried, or before you lash out at the service guaranteed to get your letter anywhere in the United States for under 50 cents, spare a moment to consider who really benefits when all worker rights are stripped away.

Here’s a hint. It ain’t the unions.

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