Detroit's bankruptcy shows even pensions aren't safe

Imagine working your entire life. Playing by all the rules. Paying your taxes. Making a lower wage than the general private sector in exchange for high employer payment into your retirement fund. Then, Bam. Sorry, we fooled you. Meanwhile bankers, hedge fund managers, CEOs, and the richest of the rich enjoy taxpayer bailouts and golden parachutes.

I have to say, this is scary. You should not mess with that generation. They are not dossile like the current generation is. They are liable to start a full on revolt, and frankly I do not blame them. Take a group of thousands of retirees with ZERO options and stop their source of income and you may just see what desperate people are willing to do.

In the case of Detroit that's just not true.

Median household income in Detroit was $25,193 in 2012.

That same year the average taxable wage (not including benefits and pension contributions) of city employees was $55,941 - more than double the wages of private sector workers in the same city in the same year.




Yep, all those people who are only making $25k a year should be made to pay MORE so the folks who made a comfy living on the public teat don't have to do without.

The reason the Bankruptcy Court is granting the unusual request to include pensions in the bankruptcy is because they're simply not sustainable. You just can't ask an impoverished city to shoulder an obligation that even a wealthy city like San Francisco would find daunting.

The Math book trumps your Little Red Book every time.

Pensions were never safe. Pensions evaporate all of the time. Just ask ex-employees of Nortel, CP Air.

Two concerns with your post:

1) You use the mean average for a very diverse group of workers. Government administrations employ a range of workers, from higher-income senior managers and skiled analysts right down to lowly minimum wage workers.

2) You're comparing apples to oranges. Just because Detroit residents have low levels of employment, educational attaiment and median earnings, doens't mean their situation is/should be the 'benchmark' for the professionals who have careers running the city. For starters, your median income stat probably includes those who are unemployed and/or have no employable skills or education while your city employee stats inevitably include many who are highly educated and skilled. Naturally, those qualified to hold professional careers will have significanly higher education and earnings than the average of an economical depressed city. Many public sector jobs don't even have an adequate private sector counterpart that you could even compare to. What is Detroit's private sector equivalent of an EMT or Fire Marshall, or Transit Planning Analyst? Lastly, I'll also wager that the many (most) of those city employees with good incomes doen't even live in Detroit, but the surronding suburbs.

I appreciate your post but I was responding to what our rezidentura apparatchik posted which was:



He painted with a very broad brush there and compared the group of Detroit municipal workers to the 'general private sector' and, in Detroit, that's hardly a comparison that's sympathetic to the city employees.

I think we are both correcting Mr. Chomsky.

From the article;



I doubt she reached anything near $55k per year if her pension is a measly $13k - typically pensions payout 40-50% of your annual income (often taken from your last few years of service). Usually, its only the management who get the gold-plated pensions you're alluding to here.




Nothing is too good for the vaunted job creators, don't you know?!?




That's true, but that doesn't make this right.




Funny, aren't conservatives always going on about how people should be responsible for their actions? Why is that philosophy fine for Joe Q Public, but not for the City of Detroit? I get that this is a seriously difficult time for Detroit, but it doesn't make this action right or morally just.

Your hackery is showing.

If the city had taken any responsibility for their actions, they should have declared
bankruptcy 20 years ago.


Then maybe something could have been done.


But they didn't, gotta keep stealing everything left and right, and the results are in.
An extra 20 years of Democrats = complete and total failure.

Your hackery is showing.

If the city had taken any responsibility for their actions, they should have declared
bankruptcy 20 years ago.


Then maybe something could have been done.


But they didn't, gotta keep stealing everything left and right, and the results are in.
An extra 20 years of Democrats = complete and total failure.

Oh, so it's alright to reneg on any promise if the fuck-up was far enough back in the past, gotcha! Yep, you're a conservative alright!

You can't just keep spending money you don't have. Even you know that.

That's true, but that doesn't make this right.

It's math. It's both true and right. The alternative is to disincorporate the City of Detroit and for the State of Michigan to discharge the entirety of the unfunded portion of the pension debt.

Bottom line is the City and unions promised more than they could deliver. The City is facing this in the court and with the fact of an Emergency Manager who now controls the city. The comeuppance of the unions for their perfidy is also becoming inevitable as current city employees will start to question where their billions in union dues are going.



Funny, aren't conservatives always going on about how people should be responsible for their actions? Why is that philosophy fine for Joe Q Public, but not for the City of Detroit? I get that this is a seriously difficult time for Detroit, but it doesn't make this action right or morally just.

What was wrong was a City that was in economic decline obligating itself to pensions that were mathematically impossible to fulfill. The unions demanded these pension rates and now they've both bankrupted the city and they've also set the stage for communities across the country to roll back pension obligations to sustainable figures.

If these people are out a pension, they are going to be a drain elsewhere.

You can't just keep spending money you don't have. Even you know that.

Oh course not, but I'm sure there is a better way than to just write it off and screw them all out of everything.

Reduce payments, extend terms, cut current wages by 10% and funnel that into the pension plan or something else could be done. I'm sure there are dozens of potential solutions that would be more fair than this it - and I'm not suggesting increasing taxes one cent either.

To just walk away from one commitments is not right or acceptable IMHO.

Detroit made a mistake by handing out pensions it can't afford - they should own up and look at some option that decreases future liability without totally screwing over their pensioners.

I seriously do not mean to be unfeeling, but so what?

Why should government employees like myself be immune from the same forces that impact the average taxpayer? Is my job somehow more important than the job performed by a researcher, a mechanic, or a private practice doctor?

Of course not.

And while I am most grateful for the pension benefits that I'm accruing I am not betting the farm on either of my pensions. I'm made my own provisions for my future and if both pension funds went broke (and they might) then I'm .

See, there's an element of self-responsibility here that all too many people are abdicating these days.

* Minimum wage workers look to someone else to pay them more for the same work.

* Silly people think Social Security is a retirement plan.

* Union workers foolishly think that a pension is a right and that they can demand impossible sums to be paid to them in perpetuity.

None of this works. Perhaps it sounds nice and perhaps it would be nice, but the reality is that someone always has to work hard and pay for the give-a-ways that the left always salivates over.

Minimum wage will always be the wage of the lowest rungs of the economy. By it's very nature this is not going to change.

Social Security is a Ponzi scheme with more people taking out of it than are people putting into it.

Unfunded and over-obligated pension funds are also a Ponzi scheme.

And while I feel bad for victims of impossible-to-fund Ponzi schemes I absolutely do not want someone else to suffer in order to make good on those false promises.

Seriously, who's supposed to pay to fund Detroit's next fifty years of pension obligations? What school districts are going to get cut to pay for the scheme? What roads won't be paved? What fire departments will be closed?

Because the money has to come from somewhere.

And, most importantly, what's the message you're sending if you bail out over-obligated pension funds? Aren't you just encouraging more of the same behavior that caused the problem?

Well, there's the modern conservative ethos for you right there.

The point is that if the pension is not forthcoming and these people are too old to work, they are going to have trouble making ends meet. Many, if not most, will have to go on some kind of social assistance, so taxpaying dollars will go to support them, so it's not good news for taxpayers.

Others will just be cold and hungry. That's the "so what." Old people shouldn't be cold and hungry.



No you are not. It could also disappear in an instant.




Which hedge fund managers won't get their bonuses?