Hostess Bands—the maker of the Twinkie, Ho-Ho, Ding Dong, and Wonder Bread—was forced to file bankruptcy last week thanks to becoming “unprofitable under its current cost structure, much of which is determined by union wages and pension costs.”
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) refused to let Hostess restructure to make its operations profitable. Instead of accepting a more-than-fair compromise, the unions forced Hostess to go bankrupt, and all the Hostess workers lost their jobs.
State governments are next. What happens when states are forced into bankruptcy?
Public unions across the nation refuse to help pay for their own pensions and luxury healthcare plans, have already forced numerous cities into bankruptcy and many states pushed to the brink. It’s only going to get worse. States across the nation have taken on $4 trillion in total debt, mainly thanks to these unsustainable labor agreements. The state debt per capita is $13,425 nationwide.
State employee pensions alone are projected to create an additional $900 billion spending gap.
The worst examples are California and Illinois. California has an $398 billion unfunded pension liability; Illinois’ is $83 billion. Remember – unfunded means there is NO money to pay for these obligations.
Unlike the BCTGM union, public unions pay back those who decide their salary. Public unions donate to the candidates who pledge to keep their benefits and salaries intact—which is exactly how states have gotten into these messes.
Remember, it was FDR who said, “All government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service… Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.” Even FDR understood that organized public labor would use militant tactics to stick it to the people they supposedly serve.
If we think losing Twinkies and Ho-Hos is bad, wait until we lose California. Unless Americans decide to put some reasonable limits on collective bargaining—especially in the public sector—unions will continue to hurt the people who help fund their paychecks, whether it’s the taxpayer or the consumer.
By Ron Meyer, American Majority Action Press Secretary