Oct 14, 2013
Front-page articles in the Detroit Free Press and the New York Times perpetrated a BIG LIE about the cause of Detroit’s bankruptcy filing. They blamed the bankruptcy on retired city of Detroit workers getting something called a “13th check.”
Retirees, who manage to live on an average of $19,213 a year, would in some years get a bonus check. It was typically a $250 to $500 bonus around Christmas. The media described these payments as fiscal irresponsibility.
NOT described as fiscal irresponsibility was government not taxing corporations and the wealthy to have adequate revenue for cities. Also not described as fiscal irresponsibility were shady pension debt deals Detroit made with Wall Street banks in 2005 and 2006.
The only connection between the pensions and the Detroit bankruptcy filing is that a political decision has been made to dump pension obligations.
Two legal rulings about these bonuses – one about the City of Detroit and another about Wayne County – found these small bonuses to be legally owed.
For 30 years now, tens of thousands of public employees in Michigan have given up raises in exchange for the promise of an occasional bonus check in retirement. These bonus checks were deferred compensation and are owed to workers.
From the wealthy’s point of view, any money going to retirees and workers must be cut because that money needs to start going to them!