Yesterday, Detroit, once a magnet for ambitious job seekers across the country, became the largest U.S. city ever to file for bankruptcy. As Detroit News columnist Daniel Howes discusses in the commentary linked below, a key factor in the Motor City’s downfall has been its mismanaged, bloated and grossly inefficient municipal workforce. And government union bosses wielding monopoly-bargaining power over teachers, police, firefighters, and other public employees are largely responsible for blocking for decades reforms that could have furnished residents far superior services at a much more reasonable cost.
Howes also points out that retired union members are likely to get hit especially hard as a consequence of the bankruptcy that the government union chiefs who purport to “represent” them have helped foist on Detroit.
Of course, it is state legislators who granted municipal union bosses in Detroit statutory monopoly-bargaining and forced-dues privileges in the first place. Elected officials in other states who don’t want their own cities to go down the same path as Detroit must either avoid instituting monopolistic government unionism in the first place, or work to roll it back. Howes is well aware that governors, legislators, and concerned citizens across the country are watching what’s happening in his city:
Detroit’s bankruptcy carries broad national implications for the nation’s $3.7 trillion municipal finance market, public-sector pension funds and promises of retiree health care for tens of thousands of public employees nationwide — all of whom could be impacted by prospective rulings in a Detroit bankruptcy case.
The filing also is a stunning rebuke of the city’s political class and 50 years of control by a co-dependent alliance of the Democratic Party and public-sector unions whose leaders fueled their campaigns and political needs with public dollars. In the end, their circular self-dealing and refusal to act to avert collapse exposed the people they claim to represent.
Likely losers in the case, filed just 17 minutes before unions persuaded an Ingham County judge to issue a temporary restraining order to block the governor, include some 20,000 city retirees. They stand to lose most of their health care coverage and a portion of their pensions as part of a difficult restructuring.
Bankruptcy petition is move into the unknown | The Detroit News