I was speaking to a colleague in Missouri this morning. He has a client who is a major supplier to Hostess. It appears that not only will the shut down of Hostess cost about 18,000 jobs, but that the ripple through the economy will be felt by the 30,000 people who supply hostess with raw ingredients, who ship the products,who make the packaging. My colleague’s client has been in touch with Hostess and has talked to some folks, and here are some curious things he has heard. First, there is a consensus, right or wrong, that union overreaching is responsible for this disaster. Notwithstanding, there are a substantial number of employees of Hostess who believe that it would be illegal for Hostess to close its facilities. I mean, Hostess can’t just put 48,000 people out of work, right? Won’t the government just step in like it did with GM and bail the whole thing out? Others believe that this is a ploy for union concessions. That may be the case. Yet others believe that Hostess will simply sell off the factories, and life will go on. My guess is that Wonder Bread, if the name survives, will likely be bought by one of the big three, who now make most of their bread in Mexico. Another group thinks that the employees should buy the factory. I like the last option, because they would quickly discover that the factories can’t support even the current pay structure.
While I’ve been trying to get away from politics for a bit, and I think it is healthy to do so, what has become apparent is that there is a very dramatic reinterpretation of “employment” going on. In the past week, a number of major corporations, resigning themselves to Obamatax, have simply decided to end the concept of full time workers. Sure, these folks will be able to buy health care on an exchange, but forget about the rest of the benefits that come with full time employment. Also, there seems to be some kind of expectation that the government is now in the business of bailing out companies whose failures will lead to massive job loss. I mean, if GM was too big to fail, where do you draw the line. Increasingly, full time employment with benefits is becoming a thing of the past. And, sorry, the United States government shouldn’t be buying up shares of every company that is failing as a jobs creation program.
I really don’t know what the future of employment will bring, but I expect that it is going to look pretty ugly for awhile, and I don’t see how jobs are going to be created unless or until the uncertainty caused by regulations and taxes are reduced. The one thing I would bet is that most of the 48,000 people who are about to face financial crisis probably voted for Obama last Tuesday. Bon appetit.