Tags: Hostess | Twinkies | overpaid | workers

Very Overpaid Workers Doomed Twinkies

By    |   Wednesday, 28 Nov 2012 07:39 AM

Workers decided it was better to have no wages than it was to accept 92 percent of what they made last year at Hostess, the maker of Twinkies and other products that is now working with bankruptcy trustees to sell off iconic and valuable brands.

A union representing about a third of its work force refused to accept an 8 percent pay cut.

One disgruntled union worker told CNN that he had made $48,000 a year as a receiving clerk before the company entered bankruptcy, but his pay had been reduced to $34,000 last year. Bureau of Labor Statistics data shows that the average salary of a receiving clerk nationwide was about $29,000 last year.

It is indisputable that pay cuts hurt anyone, but a painful downward adjustment might be necessary at other companies besides Hostess. If work is only worth about $14.50 an hour, then that is all companies can afford to pay. The receiving clerk at Hostess was being paid about $24 an hour, more than 65 percent above average.

Wages for many jobs became disconnected from the reality of the market when the economy was doing better. To be competitive, companies might need to lower wages for jobs that can be done with little training.

Rather than fighting to protect overpaid jobs that cannot be sustained in the long run, unions and activists should accept that the economy is competitive and valuable skills will always be rewarded. Those with low skills are destined for low wages, but skills can be developed in the United States where opportunities still exist for anyone.

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MichaelCarr
Workers decided it was better to have no wages than it was to accept 92 percent of what they made last year at Hostess, the maker of Twinkies and other products that is now working with bankruptcy trustees to sell off iconic and valuable brands.
Hostess,Twinkies,overpaid,workers
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2012-39-28
Wednesday, 28 Nov 2012 07:39 AM
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