Detroit bankruptcy highlights unfair treatment for America’s workers

Labor leaders from the AFL-CIO called on President Obama and Gov. Rick Snyder to provide financial help to the struggling city of Detroit. The city filed for bankruptcy last week under the cloud of an $18 billion budget deficit, and Gov. Snyder assigned an emergency manager to oversee to austerity measures that call for the reduction of city workers’ wages, health plans, and pensions.

The move to cut the wages and benefits of city workers comes on the heels of a controversial law passed last year in Michigan that curbs collective bargaining powers of public unions. The law was proposed and pushed through a Republican-controlled legislature by Snyder, who then survived a close recall election from Michigan’s traditionally pro-union voters. Similar measures also passed in Wisconsin, despite major opposition among populist Democrats and voters, but failed to pass in Ohio, where voters rejected the attempt to gut the power of public unions in response to the Great Recession.

The move in Michigan highlights President Obama’s failure to address the lopsided treatment of workers and bankers in the panicked climate of austerity measures, and signals that politicians are no longer capable of representing the real economic interests of the majority of their constituents.

Lee Saunders, the chair of the AFL-CIO said, “There is no question there’s a crisis in Detroit, but impoverishing the city’s public service workers and further decimating public services is not the solution. The whole country is watching how this crisis gets resolved. As the nation emerges from the worst of the Great Recession, it is time for Congress and the White House to make it clear they will not turn their backs on our urban centers.”

The contradiction in treatment between middle class Americans and powerful institutions like banks is becoming more apparent as the former are asked to make financial and political sacrifices while the latter are rewarded for their bad behavior with bailouts. On the one hand, the city of Detroit has long been plagued by political corruption and lax oversight, which has contributed to its massive financial problems. On the other hand, the main reason why there is so much corruption is because the city has suffered through several episodes of recession, corporate flight, and declining revenues. The accumulative effect is a dense urban center that still needs to provide services with a jobless shrinking tax base to do it with.

The historical fact is that Detroit’s decimation lies squarely at the feet of American auto corporations in the 1980’s, as well as their response to the 2008 financial collapse. They failed to find workable solutions to financial woes shared by all, choosing instead the easy but short-sighted route of laying off thousands of workers that led to further unraveling of the city’s economic fabric. Despite the ballyhoo of “creative destruction” that is unleashed by predatory capitalism these jobs usually don’t come back and when they do they pay less and provide less secure working conditions.

As Michael Moore so eloquently put it in his classic documentary Roger and Me, about the destruction of American auto manufacturing:  “As we neared the end of the twentieth century, the rich were richer, the poor, poorer. And people everywhere now had a lot less lint, thanks to the lint rollers made in my hometown. It was truly the dawn of a new era.”

The future of America is here folks, and it is ugly, short-sighted, and deeply, radically unfair to American workers in both the public and private sectors.