the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Apr 17, 2023
As part of its bankruptcy plan, the City of Detroit must resume making payments into its two pension funds for general retirees and for police and firefighters.
Despite the fact that the city achieved a 157 million dollar surplus in last year’s budget, the city is asking the U.S. Bankruptcy Court to allow it to spread out its pension payment obligations over 30 years, instead of the currently required 20 years.
Meanwhile, Detroit city retirees are speaking out about the hardships they are experiencing as a result of the cuts imposed upon them in the name of the city’s bankruptcy. Many are having a hard time getting by on their pensions. General retirees not only took a 4.5% cut to their pension benefits, they also had their cost-of-living adjustment taken from them, which amounts to an even bigger cut.
Assuming a COLA of 2.5% per year, in the years since the bankruptcy plan went into effect, the loss of COLA would mean city retirees would have lost about 25% in pension increases, on top of the 4.5% cut they took. Police and firefighter retirees managed to hold onto a 1% COLA, but they don’t receive Social Security, so their retirement income is solely based on their pensions.
Some retirees like David Sole and Yvonne Jones are asking Detroit Mayor Mike Duggan and the City Council to help out the general retirees’ pension fund by throwing in some of the federal pandemic relief money it has on hand. As always, the city administration finds an excuse to say it can’t do it because its hands are legally tied by the terms of the bankruptcy plan.
While city retirees are left trying to get by on what’s left of their pensions, the bankruptcy plan did make sure the banks that pushed all kinds of rip-off financial schemes on the city for decades got paid. Even if they had to accept reductions in the amounts they were paid, we can be sure none of their stockholders or top executives had trouble just getting by.
Meanwhile, the City of Detroit continues to hand out billions in subsidies and tax breaks to billionaires like Dan Gilbert and the Ilitch family. Of course, they manage to explain that away using “legalese,” like saying the money for supposed developments funded by the billionaires comes out of a different fund than the general city budget. But that’s only because the politicians deliberately chose to put property taxes from downtown Detroit into a separate fund.
Certainly, the City of Detroit bankruptcy was not solely a result of bad policies on the part of local politicians. They’re also a result of rotten policies pushed by politicians at the state and federal level as well.
What’s happened to City of Detroit retirees simply shows that even having a pension is no guarantee of financial security in old age, not so long as the economic system remains in the hands of the wealthy, their corporations and banks, and the politicians who serve them.