EDITORIAL
Detroit Is Every Worker’s Future

Aug 5, 2013

The essential aim of the Detroit bankruptcy is to cut the pensions of city workers already retired and to eliminate the city’s obligation to cover their medical costs.

Yes, Detroit’s finances are a disaster. Yes, the situation for the population is catastrophic. And, yes, Detroit is using the catastrophe its population is living through as the pretext to strip former city workers of the retirement they earned through long years of work.

But no one should believe that the attack on public sector retirees will be restricted only to Detroit. Detroit is simply the battering ram, setting a precedent to be used against all public sector workers.

Detroit had underfunded its pension trust by 3.5 billion dollars. Other cities are in worse shape. A study by the Pew Research Center shows that the 61 largest cities in the country owed 217 billion dollars toward their retiree pensions in 2011. In fact, the actual amount–once all the “creative” book-keeping is removed from city balance sheets–totals up to almost 650 billion dollars owed.

States’ debt to their retirees is even worse–they’ve shorted their pension accounts by 1.4 billion dollars (or four billion under new, more accurate accounting rules).

The State of Michigan, which pushed Detroit into this bankruptcy, actually has a greater share of its pension costs underfunded than does Detroit!

Legally, cities and states don’t have to go into bankruptcy court to junk pensions and retiree health care. They don’t need an “emergency financial manager” to push it through. Nothing guarantees public sector workers that they will have a pension when they retire; nothing guarantees them that pensions will continue to be there after they retire.

Guarantees? What guarantees? Union contracts? They come to an end every three years. Legislation or constitutional guarantees? The Michigan Court of Appeals effectively tore that up in Detroit’s case–the constitutional guarantee is only a “policy statement.”

There is no Pension Benefit Guarantee Corporation for public sector workers, only the promises made by cities and states, that their workers would have a pension and health care for life. But the Supreme Court has already ruled in a case involving GM salaried workers that such a promise, even when put in writing, does not have the same weight as a “proper contract.”

There is no guarantee, only the willingness of cities and states to live up to their promises. Willing? Just how willing are those cities and states, which have systematically underfunded their pensions, while passing out tax breaks and subsidies to big corporations?

Every tax break given to a corporation was paid for by a chunk out of some public sector worker’s pension, out of their future health care. As you watch the courts tear up promises made to generations of workers in Detroit, know that you are watching your own future.

The problem of pension underfunding is not too many retirees and too few active workers. The pensions shouldn’t be underfunded. Period. They should have been paid for all along. The funding for them was part of the wage bill that cities and states agreed to years ago. If they didn’t fund those pensions it’s because they were giving the money away to Big Business.

Well, it’s time they got that money back. It shouldn’t come from the active workers. It shouldn’t come from the population of cities, counties and states. It should come from those who got the money, year after year: Big Business.

Workers in Detroit know who got money from the city, they know about all those big companies and all those petty real estate speculators who have been living large off the city’s buck. The city workers’ aim, just like the population’s aim, should be to get those bucks back.

Today, the wealthy are holding hostage the pensions of all workers. Well, take over and hold the buildings of GM, Ford, Chrysler and the little rats who scurry along behind them–take the buildings hostage, hold them. Make it clear that business as usual is not going to go on any more. Not in Detroit, not in any city in the country.