That's not a realistic choice, so it's not a compelling argument. The workers in this case don't "prefer" cash, it is the only option.
However, if there was a basic income in this country, I think workers in a situation could indeed make that choice. If it was $10 basic wage + $10 equity OR + $10 wage now there's something to discuss because that's a more interesting trade off.
(((edit to clarify based on comments: yes I meant a $10 basic income + either ( $10 equity or $10 wage )
I didn't even comment on the parts of the story that actually made me unhappy, which was the ridiculous debt financing deal, the blatant union crushing, skipping out on pension commitments, and ultimately laying off 90% of the original work force in order to "extract value" from a mediocre junk food company which is just going to end up in bankruptcy again when they're done with it.
If we're talking about a basic income for just working aged Americans (because kids don't need it and the elderly are already covered by other programs) we're talking about roughly 200M people.
200M * 2000/hours per year * $10 hour = 4 trillion dollars a year.
For comparisons sake the current federal budget is about 3.8T.
I picked the $10 value for UBI at random (well, because that was the wage in the article). I should have probably thought about it a bit more. As you point out, it's a bit expensive. Maybe we could pay for it by mining diamond asteroids, who knows?
A more reasonable assumption might be $5 UBI + $10 wages = the proposed $15/hr affordable living wage.
And yeah, you'd pretty much have to tax the rich and the corporations more and stop spending so much on the military to get there. But money was invented by people, I feel like generally more of it should be in the hands of the average citizen. Sure, I want a Scrooge McDuck money vault as much as anyone, but I will argue that wealth inequalities around the globe cause real harm, and a bit more wage/equity/reward flexibility in the way corporations pay non-tech workers might be an improvement.
I'm confused why you are bringing up a basic income. I might also bring up a basic job guarantee, open borders or other random political proposals, but that's just derailing the conversation.
I agree that Hostess probably didn't offer equity. However, if it did, do you think more than a tiny number of workers would have chosen equity over cash?
Workers don't get upside if the stock does well for the same reason they don't get downside when the stock tanks. They are more risk averse and have a stronger desire for liquidity; as a result they are paid cash which satisfies their preferences.
Out of all the things that make you unhappy, which things do you think wouldn't have happened if private equity allowed Hostess to die? From what I can tell, 100% of the workers would have been laid off, the pension still would have gone bankrupt and the union would no longer exist.
I suspect the workers would not have liked it. They preferred cash to illiquid equity in a questionable company, and received it.