Monday, November 19, 2012

Is a moral victory a victory? BCTGM/Hostess and Hobby Lobby/Obama

On Friday, I blogged about the role of the Bakery, Confectionery, Tobacco Workers, and Grain Millers' International Union in the liquidation of Hostess Brands. That post focused on the union itself and the many industries in which its workers work; I didn't really get into the "whose fault this was" argument.

Subsequently, I expressed my feelings in a Google+ comment:

I'll grant that the company was not only mismanaged, but was also in a declining business - despite the worker's pride in the business, the junk food and junk bread business consistently runs afoul of the Michael Bloombergs of the world

Given all that, I still blame the unions in part. At the end of the day, is it better to take an $9,000 pay cut, or a $34,000 pay cut? Perhaps the union members have their pride for not agreeing to a bad job offer, but a bad job is better than no job at all.

You will not be surprised to learn that the BCTGM disagrees with my assessment. Its website is now available, and this is part of what the union had to say:

Pundits should be applauding the Bakery Workers of Hostess Brands for standing up to Wall Street interests and standing for decent working standards and the middle class....

t’s heart-breaking to think of each of those workers in cities and towns all across America who have seen their jobs vanish. But as painful as it is, it’s heartening to know these brave workers stood up against the greed and destruction of Wall Street.

It’s incredible.

The unified Bakery Workers rejected the last cruel deal from executives by a vote of 92 percent. They chose to raise their heads with pride, as well they should.

From the perspective of the union, this is a great victory. From the union perspective, it is better to reject a substandard contract than it is to accept it.

In other words, this is a moral victory.

I don't know if the term "moral victory" is technically an oxymoron, but it certainly is not a victory. The term is only used when you lose - you can feel better by saying that you've achieved a moral victory.

To illustrate the term, let's take a look at something from the other side of the political spectrum - Hobby Lobby and contraceptive health benefits. (DISCLOSURE: I am a member of the Lutheran Church Missouri Synod, which agrees with Hobby Lobby on this particular mandate.)

In a sense, Hobby Lobby is facing a choice similar to that faced by the BCTGM union. Hobby Lobby can keep its principles - in this case, to refuse to pay for particular medical services that Hobby Lobby's ownership believes are immoral - or Hobby Lobby can acquiesce to the government's demands and escape financial penalties:

The mandate will hit Hobby Lobby in about two months — on January 1, 2013. At that point, it will face the choice of dropping employee health insurance altogether (and paying about $26 million a year in penalties), or continuing its current plan (which will expose it to about $1.3 million in fines per day).

As I noted above, there is actually a third choice - include morning after contraceptives in a Hobby Lobby sponsored health plan.

Unless a court intervenes, I suspect that it is likely that Hobby Lobby will drop health insurance for its employees altogether and face the $26 million in penalties. Hobby Lobby is a privately owned firm, and therefore is not subject to stockholder pressure to do one thing or another. Therefore, Hobby Lobby will probably choose the avenue that best agrees with their consciences - and that would presumably be to "wash its hands" of (in its view) supporting abortion.

Another moral victory. The employees are thrown to the wolves of Obamacare, and the company pays $26 million a year, but the owners have a clear conscience.

From a financial perspective (excluding externalities or long-term results), moral victories are failures. Thousands of BCTGM employees are out of work, and Hobby Lobby employees may be about to lose their health insurance.

But what of the long term? Will Hostess' liquidation serve as a turning point that increases union member benefits in the long run? Will Hobby Lobby's loss lead to an eventual repeal of the mandates that force companies to do things that violate their consciences? Only time will tell.
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