How the unions screwed Detroit

Forbes has an article called “Detroit gave Unions the Keys to the City, And now nothing is left“. I don;t need to add any more commentary, other than when a union boss starts talking about economic solutions you should just yell one word at them…”Detroit”.

We keep hearing that the car industry in Detroit is “on the rebound” or that “Detroit is back.” In fact, the city itself is on its back, and it’s bounding toward bankruptcy or a state takeover. How did one of America’s most storied cities land in this predicament? While the city population has shrunk (from a peak population of 1.8 million in 1950 to 714,000 in the last census), it has hardly reduced the government that serves it. All you really need to know about Detroit, which is facing a $327 million budget gap, is that last year it was discovered to still be paying for  a “horseshoer” (or farrier) on the Detroit Water & Sewer Department (DWSD) payroll. This individual costs some $56,000 in pay and benefits, despite the city not having any horses to shoe in his department.

Union bosses insisted the DWSD (average compensation: $86,000) needs more, not fewer, such unionized employees, a view associated with a broad spectrum of thinkers from Jimmy Hoffa to the Keynesians running the United States. The DWSD has more than twice as many employees per gallon of water pumped as that other paragon of Midwestern governance, Chicago. An independent report said four out of five employees in the bloated department were redundant and discovered a thicket of union regulations driving up costs.Plumbers complained that, due to union work rules, they had to wait to fix pipes until duly authorized “operators” came along first to shut them off. 

And don’t forget the teacher unions:

The Detroit Federation of Teachers, which enjoys rich pay packages (corrected for purchasing power, Michigan teachers are the best paid in the nation, reported the Mackinac Center for Policy Policy), would do the UAW proud. Its employees pay only ten percent of the cost of their insurance premiums. While they take extravagant numbers of sick days or personal days — 8 per teacher — they also cash in on “unused sick days” to the tune of $14.5 million a year. What other industries are so surprised when you aren’t sick that they pay you a bonus? Then again, we’re talking about a group that paid people to quit — $4.1. million in “termination bonuses” were handed out to teachers’ union members in 2010-2011. And last December the city inexplicably  sent out archaic “longevity bonuses” ranging from $150 to $750 depending on years of service for non-union municipal employees, even though the benefit was removed for unionized employees in 2009.

The ruination by the unions in Detroit is spectacular.

What Detroit does is give unions the keys to the treasury until nothing is left. That day has come, and their own success is killing unions. What can save Detroit? Nothing, probably, though a group of waggish libertarians proposed buying the Detroit river’s dilapidated park Belle Isle for $1 billion (goodbye, budget deficit! For a couple of years, at least) and turning it into a lightly-regulated capitalist wonderland: Macau of Michigan. The New York Times predictably mocked the scheme (because, obviously, Hong Kong and Singapore are doing so badly) but what other plan could make Detroit safe for capitalism again? Detroit is already a union wasteland. It could hardly do any worse if it became home to Galt’s Gulch.


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  • williamabong

    Obviously the US unions went about it the wrong way, the kiwi way is better, first you help to have a political/voting system that is easy to manipulate installed via misinformation, then you use union members monies to help install all your washed up flunkies into elected and list positions, and then you run the show from inside.
    Problem comes when you need to gain power you have to align yourself with self interested loonies (Mana, Maori, Green,Peters) you give the nuts the key to the funny farm.
    Watch this space, 2014 will be an interesting year, it may just be when the wheels fall off.

  • blazer

    forget about Detroit…read the Forbes article about how Wall St derivatives destroyed the ….WORLD!

    • No they didn’t. World still standing it’s just the economy is stagnating because of union idjuts.

      • blazer

        go and make a nice cup of tea,theres a good girl.

  • Steve R

    Dispite the Union issue ,there is still a case of a city massively overspending . Sound familier ?

    We Aucklanders live in a city which seems to be in a frenzie of spending .Just take a moment to think of all the projects our council is taking on . heres some that I can think of
    Train set
    Taking over of Eden Park and the cloud

    A 55 million indoor white water rafting facility
    Swapping the usage of our main stadiums ( eden park , mt smart , western springs )
    just the cost of moving cricket to western springs alone is 29 mill
    council support of living wage
    v8 supercars

    Thats just a few that jump to mind , all done on borrowed money .
    Will we be able to afford the interest alone on these plans .
    Oh hang on this week they just figured out that if we live in highrises they can get more than one set of rates for each bit of land .

    • Hazards001

      Hear Hear and to hell with the spelling. You’re anger and passion are not misplaced. Proud to be a JAFA also. Not even remotely proud of the abortion that Hide has saddled us with via Loopey Len and his amalgamated council that is as factonalised as it ever was and has seen our rates increase as never before due to a cost cutting exercise. THANKS VERY MUCH Rodders

    • Mr_Blobby

      You forgot the empire building, they are on a crusade to write as many bylaws as possible, with the minimum public input, they all have one thing in common it adds additional costs to businesses and ratepayers. All under the guise of making Auckland a more livable city, just how you achieve this with more compliance costs and rates increases that outstrip inflation is beyond me.

    • Steve R

      thanks guys , i sometimes wonder if people think the same way . And whats so important about Lens campain to be the most livable city . Its only going to make us the most broke city

  • TomTom

    Actually, you should probably look at the metro population of Detroit. That has stayed about the same, from a peak of 4.45 million people at the 2000 census to a low of 4.3 million people, since the 1970s. Over that same time, the Detroit city proper went from 1.5 million to 700,000 in population – so clearly some of the changes in Detroit demographics can be attributed to the changing preferences of Detroiters to the suburbs over centre city.

    ->Note that I genuinely do dislike unions, especially as to how they don’t fucking do what they’re supposed/paid to do – represent their members – whilst simultaneously ripping members off. The local cleaning union tried to convince those of us on the after-school cleaning crew to join them, promising that we would get at least 50c/hr pay rise when the union take was a dollar an hour! However, it’s irrational to blame all the world’s ills on them.

    • TomTom

      And my mention of the population of Detroit refers to how the funding of cities and counties work in the States – the city proper has to fund all those expensive stadiums and centres and roads to serve commuters and visitors whilst having less rates contributors and the suburbs get more in rates term from larger populations but can spend far less money on just roads and similar items. This is probably a case where amalgation of local authorities would help to improve the situation.

      That said, the horse shoer thing is still pretty ridiculous, and savings can definitely be found by dealing to the unions.